The article has been automatically translated into English by Google Translate from Russian and has not been edited.

How to turn a daily cup of coffee into 100 thousand dollars

'24.07.2017'

Source:

Instead of buying coffee on the way to work, boil it at home, and put the money in a piggy bank. Photo: depositphotos

It seems so familiar - a quick stop near the coffee machine on the way to work or while you are taking your children to school. And spending $ 3,50 or a little more if you buy coffee at Starbucks does not seem like a serious expense. But you can accumulate a substantial amount for your budget without spending this money. He writes about it All the moms.

Business Reporter Russ Wiles and Investment Manager Vanguard group told in his article about how daily savings can be turned into substantial capital.

And this is how it works:
Step 1.
Take the amount you spend every day on a cup of coffee on the way to work and put it in a cookie jar. As an option - in the piggy bank.

Step 2.
Do not touch this money in any way.

Step 3.
Open the jar after 12 months. You will have there 1200 - 1300 dollars. Perhaps even more if you drink more than one cup of coffee a day or spend more than $ 3,50 on it.

Step 4.
Invest this money on 30 for years in an inexpensive, but reliable and balanced fund. Suppose on 6% annual income.

Step 5.
Keep your coffee money in an individual account. For example, on a retirement account Roth. Why exactly Roth? This option is simpler from a tax point of view, because balance sheets Roth-IRA grow with deferred taxation, and withdrawals are exempt from paying taxes. This is an added bonus.

Step 6.
And now let's count. 1260 dollars annually x 6 percent annually x 30 years = approximately 106 000 dollars. But for this you have to put the saved money into a bank or a piggy bank every year, and from there transfer it to the fund. If the percentage is higher than 6, then the amount for 30 years will be more.

The amount that can be called the “investment of a cup of coffee” is small, but the return after some time will be quite substantial.

It is not necessary to be a financial expert in order to understand the essence: small daily savings can lead to large profits.

And definitely, this is food for thought. In addition, it is valuable advice that you can give to your children.

Of course, you ask - how to live without coffee? The answer is simple - make a cup of coffee at home and take it with you in a thermos.

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