A $23 Cup of Coffee


Forbes has come out with its list of the richest people in America.  One of them is the CEO of Starbucks.  His secret is that he doesn't buy coffee at Starbucks. -Conan O'Brien

$23 for a cup of coffee.  Most people would say this is a ludicrous price to pay for a jolt of java.  Yet millions of people spend $4 for a Starbucks daily.  What they don't realize is that if they saved that $4 and invested it for 30 years at 6% interest, they would receive $23.  The compounding effect of money multiplies the benefit of saving a dollar today, for much greater return in the future. Following are a few simple ways you can save money, and financially invest in your future:


  • Don’t buy unnecessary items, save the money instead. As an example, take bottled water.  The United States has the safest public water system in the world.  Yet, we also have the largest bottled water sales. In 2008, the average American drank about 30 gallons of bottled water per person in the U.S. (Peter Gleick, author of Bottled and Sold: The Story Behind Our Obsession with Bottled Water) This equates to 320 12-ounce plastic bottles. At $1 apiece, the average spending of $320 a year on water would be over $1,800 in 30 years, just for not drinking bottled water for one year.  If you cut out bottled water for thirty years and saved the difference, you can add $27,000 to your retirement account!


  • Look for ongoing expenses to provide the greatest opportunity for reduction in savings. A few years ago, I calculated how much I was spending for various types of insurance—car, home, life, health - and was astounded at the result. By shopping around, I reduced my auto insurance by 50%. I then cut my homeowners insurance by having an inspection and removing unnecessary coverage.  New term life insurance gave me more protection at lower cost.  And, by switching to high-deductible health insurance and dropping my vision and dental plans, I lowered my costs and saved on taxes.  The net effect was savings of over $5,000 per year, equating to $500,000 for my retirement account in thirty years.  Do an annual review of all of your insurance, comparison shop your rates, take the minimal coverage and save the difference.


  • Review all your monthly expenses at least once a year. Do you really watch all those premium cable channels?  If you call your cell phone company, will they give you a better rate? Did you sign up for recurring services that you no longer use, like computer service agreements or online games?


You may be surprised at how much you can save, and remember that, for every dollar you save this year and for the next thirty, you will be adding $90 to your retirement account.  That's great motivation and a surpassing return!

Action Points
Make your own coffee and bank the savings.
Don't buy bottled water--save money and the environment.
Shop for cheaper insurance and reduce your coverage.
Review and reduce all your monthly expenses.
Remember that every dollar you spend today will be worth far more thirty years from now, and spend wisely.

Hundreds of thousands of dollars in your retirement account!

Excerpted from Chapter 1, A $23 Cup of Coffee, of The Surpassing Life: 52 Practical Ways to Achieve Personal Excellence, thesurpassinglife.com.

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