When it comes to spending I sweat the small stuff.
I’ll never buy a National Lottery ticket, even the £2 minimum, as I know that the probabilities say that I’m more likely to win significantly more by investing it rather than buying the ticket. Even if there is a ‘£20.9M Rollover plus a guaranteed raffle millionaire’ tonight. During the FIRE (financially independent retired early) accrual phase investing that £2 a week turns into nigh on £1,300 after 10 years (assuming a real 4% annualised return). During the drawdown phase not feeding a weekly lottery habit, even a £2 a week one, means one needs £4,160 less (assuming a 2.5% withdrawal rate) wealth before FIRE becomes a possibility. I know how hard I have to work to save £4,160.
Unlike many of my colleagues I also don’t pay to participate in a daily morning caffeine fix. I was travelling on the company dime recently and purchased a coffee at one of these new fangled remote Costa stations. Cost £2.10. To feed a workday daily habit like that one is going to be spending £568 per year. Take the free work supplied coffee; invest the money saved and all of a sudden you’re £6,800 closer to FIRE after 10 years. Keep the habit up in FIRE and you’d need additional wealth of £21,840 (less a small amount of wealth to make one at home) before calling oneself FIRE’d. I value earlier FIRE rather than an expensive cup of daily brown but I of course appreciate others might be different as they value it where I don’t. Having different values is after all one thing that makes the world interesting after all.
I also sweat the small stuff when it comes to investing expenses.
I’ll never buy a National Lottery ticket, even the £2 minimum, as I know that the probabilities say that I’m more likely to win significantly more by investing it rather than buying the ticket. Even if there is a ‘£20.9M Rollover plus a guaranteed raffle millionaire’ tonight. During the FIRE (financially independent retired early) accrual phase investing that £2 a week turns into nigh on £1,300 after 10 years (assuming a real 4% annualised return). During the drawdown phase not feeding a weekly lottery habit, even a £2 a week one, means one needs £4,160 less (assuming a 2.5% withdrawal rate) wealth before FIRE becomes a possibility. I know how hard I have to work to save £4,160.
Unlike many of my colleagues I also don’t pay to participate in a daily morning caffeine fix. I was travelling on the company dime recently and purchased a coffee at one of these new fangled remote Costa stations. Cost £2.10. To feed a workday daily habit like that one is going to be spending £568 per year. Take the free work supplied coffee; invest the money saved and all of a sudden you’re £6,800 closer to FIRE after 10 years. Keep the habit up in FIRE and you’d need additional wealth of £21,840 (less a small amount of wealth to make one at home) before calling oneself FIRE’d. I value earlier FIRE rather than an expensive cup of daily brown but I of course appreciate others might be different as they value it where I don’t. Having different values is after all one thing that makes the world interesting after all.
I also sweat the small stuff when it comes to investing expenses.
