""If you waste money on coffee, it's like 'peeing $1 million down the drain,'" says Suze Orman. "You need to think about it as: You are peeing $1 million down the drain as you are drinking that coffee," Orman says, as quoted by CNBC. "Do you really want to do that? No." Consider this. Right now, the average cup of coffee can cost about $7."
"Instead, according to Suze Orman, "$100 a month in a Roth IRA, over 40 years, is $1 million. So, you need to think about it as you are peeing $1 million down the drain after you are drinking that coffee. If you just simply used your money to purchase needs versus wants, you would find the money to invest in your retirement account.""
"For you to have money, you have to learn to live below your means but within your needs. How do you do that? You do that by simply purchasing needs versus wants. What is a need? Need is food that you buy at a grocery store. What is a want? A want is going out to eat at a restaurant and doing it over and over again. Going out to eat contributes to massive credit card debt, too, which can weigh on you in retirement."
An average cup of coffee can cost about $7. Purchasing coffee daily costs about $210 per month and $2,520 per year. Over 40 years, daily coffee spending can total about $100,800. Investing $100 per month in a Roth IRA for 40 years can grow to roughly $1 million, illustrating the power of long-term compounding. Prioritizing needs over wants can free funds for retirement contributions. Reducing frequent restaurant meals, takeout, and other discretionary purchases can substantially increase monthly savings. Living below means but within needs reduces reliance on credit and lowers credit card debt burdens.
Read at 24/7 Wall St.
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