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So if somebody offered you half a million dollars to pack your lunch, would you take it? Because I think you've just been given that offer. Can brining your lunch to work make you rich?
Can brining your lunch to work make you rich? One suggested way to save money is by bringing lunch to work. If you bring lunch four days a week. and treat yourself one day each week, for variety or to just hang out with your co-workers. It's amazing how much this helps to save, and all of it can goe straight into your saving account (a.k.a. your future). But it can't really be that much, can it? After all, take-out lunches are pretty cheap. Well, that's true, they are, but let's just do the math for fun. I work in downtown San Francisco. On average, when I buy lunch, I spend $7. This includes an occasional sit-down lunch, but usually I get something to go and bring it back to the office. When I bring lunch from home, it costs an average of $2 for a sandwich (my favorite is peanut butter and jelly), yogurt, and fruit (hey, this lunch-bringing has the side benefit of also being healthy!). Drinks are provided by my employer, so I don't need to worry about that. So let's see, four days bringing lunch at $2 plus one day out at $7 equals $15 per week. Eating out every day would cost $35 per week, so I save $20. $20 a week! That's over $80 a month -- that covers my utility bills right there. Who couldn't use that? The Long Term Plan But let's take this to the next level. Like I said, I don't actually use that to pay my utility bill. This is extra money, so I'm going to sock it away for my future. I follow this plan every week except when I'm on vacation, which adds up to about 50 weeks per year. My $20 a week turns into $1,000 a year. Not a bad chunk of change! Now, I'm pretty young still, at 26, and I figure I have about 40 years to work before I retire. Let's say I sock away that $1,000 in a jar underneath my bed (this is hypothetical, please do not break into my house and snoop under my bed. you will be sorry, I promise!). When I retire, that jar would have $40,000 in it. Not too shabby, but there's a reason we don't keep our money in jars under beds, and it's not just to keep burglers from getting ideas. The Miracle of Compound Interest When you put your money in the bank, you're actually loaning it to them, and they pay you for the privilege. It's called interest. That interest gets added back into your account, which the bank is still borrowing, by the way, and so they pay interest on that. That's called compound interest, and it makes your money grow impressively. Say I put that $1,000 a year into savings and CDs that paid an average of 5% interest. That $40,000 has now turned into $120,799! Wow! Not bad for packing a sandwich four times a week. But we can still take this one level further. Let's try putting that $1,000 into the stock market instead. Historically, the stock market has provided an average return of about 11%. You'll want to make sure money in the stock market is invested for the long haul, since it does go up and down, and you don't know when a down time might happen. But I have 40 years here, so I'm going to put my money in stocks and leave it there. What is that average return of 11% going to do to my $1,000 a year? My $20 a week? My measly little $5 a day, four days a week? Well, I now have a grand total of $581,826. Well over a half million dollars! And hopefully all the fiber I've eaten from those whole wheat sandwiches will keep me healthy enough to enjoy it! So if somebody offered you half a million dollars to pack your lunch, would you take it? Because I think you've just been given that offer. |
