Deborah Rankin

How to get rich on a margarita a day

Margarita a Day Magic

What would happen if you stopped a small daily expense and invested the money instead? According to financial experts, quite a lot. That’s the magic behind a newspaper article I remember from years ago in Houston, Texas. Supposedly if you saved the money you were spending on your daily margarita (!) you could end up really rich.

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Depending on where you live and what you like, you might think about gourmet-flavored-coffee or unnecessary-cab-ride or supersize-soft-drink-when-I-could-really-drink-tap-water magic.

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It’s All About Compound Power

Small changes make a big difference over time. That’s why my Twitter profile says “I believe a small step in the right direction can change the world.” Think about it.

• Zach Hurd in Bob Sircy’s office at Southwestern Investment Group ran numbers for me today. If you invest $4 a day at 8%, after 20 years you have $72,127.
• Tony Robbins in Money Master the Game writes about a young man who spent $75 every two weeks buying large twelve packs of Smartwater. Aside from littering the environment with thousands of empty plastic bottles, investing that $1800 that cost per year for 40 years at 8% would give him a retirement nest egg of $503,605. From water!

So What?

I know, you have enough money for your daily latte or banana blueberry slushy. And you need to enjoy life because you work so hard. Or your boss is so difficult. Or your loved one is sick. I sometimes feel the same way.

When we’re young the future seems so far away it’s inconceivable!

Some of us who aren’t so young think it’s too late to make a difference, what’s done is done, so (shrug your shoulders) what will be will be. Not so fast Grandpa! Even if you’re older than you ever thought imaginable…let’s say 50…you might have lots of years left! You say your father lived until he was 85? Then you could have 35 more years on this earth in which you could accomplish something fun or meaningful with your financial resources.

What Gives You Emotional Oomph?

Translate those investment earnings into its emotional oomph for you. $72,127 could mean:

• Waiting one more year before taking Social Security, then you’d draw 35-40% more every year afterwards
• One or two years of tuition for your child or grandchild at a good school
• Climbing Mt. Kilimanjaro or riding your motorcycle across country
• Rescuing animals, feeding orphans, stopping human trafficking
• Seeing a baseball game in every major league ballpark

As Nashville author and keynote speaker Rory Vaden says about the paradox of sacrifice in his book Take The Stairs:

Easy short-term choices lead to difficult long-term consequences. Difficult short-term sacrifices lead to easy long-term consequences.

My Story

I once moved from the life of a suburban tennis-playing stay at home mom to one of sacrifice while my husband went back to graduate school. I supported the family of four on the modest salary I earned at a state veterans home. It paid off financially and seven years later our combined income was higher than it had ever been. The amazing thing is that I have as many good memories from the two lean years as from the two rich years that preceded them.

Remember the time the hamster escaped from its cage and we didn’t find it until your birthday party when the dead animal smell started stinking from where he was stuck in the wall?
I loved walking my hound dog Ellie every day into the hills of Happy Hollow Park.
You got to see your grandparents every weekend and play with your cousins!
Remember getting Cuonzo Martin’s autograph when your friend whose dad was a basketball coach took you into the Boilermaker locker room?

Final Thoughts

Next week I’ll post a video about two books that have given me good financial advice. Until then, what do you think? Does it make sense to save a bit day to day, or is it important to have the small treats you’ve grown to love? You can post your comments on my Facebook page Booktalk Lady.

©2015 Booktalk Lady LLC

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