The Other McCain

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A Fresh Hot Cup of Poverty!

Posted on | July 12, 2011 | 38 Comments

Forget all those scientific studies about the health effects of coffee. What about the economic impact?

As a registered investment advisor, Steve Orr is used to juggling millions, but he knows those millions started out as pennies.
“It’s the little things,” said Orr, president and owner of the Orr Financial Group. “It’s the dollar here, two dollars there things that we pick up every day that start to add up. The insidious thing is that it still doesn’t add up to so much that we think it could make a difference in our futures, because we only see those expenses in terms of the dollars we spend, but not the dollars – plus the interest – we could be earning on them.” . . .
To illustrate that, Orr can demonstrate how simple, everyday expenses – when eliminated – can turn into big bucks down the road.
For instance, the daily specialty coffee from the local coffee stand costs about $3.95, depending on where you live in the U.S. If you got one every day of the week for about 40 weeks out of the year for the typical 35 year employment span between ages 25 and 60, it would cost you about $27,650 over that 35 years.
The formula looks like this:

Coffee or Latte — $3.95 X 5 = $19.75 X 40 = $790 X 35 = $27,650
Energy shot — $3.99 X 5 = $19.95 X 40 = $798 X 35 = $27,930
Muffin — $3 X 5 = $15 X 40 = $600 X 35 = $21,000
Lunch — $8 X 5 = $40 X 40 = $1,600 X 35 = $56,000

“If you were to put the total of all these items into your 401(k) or Roth IRA or any other type of retirement investment vehicle every year for 35 years and you earned a minimum of 3 percent interest every year on that money, you’d have an extra $246,560 in your retirement account at the end of that 35 years,” Orr said.

Orr’s Web site is here. His new book is The Noisemakers: Why They Keep Losing Your Money and How to Make it Stop.

UPDATE: Welcome, Instapundit readers!

Category: Economics

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