Today I dropped $1.50 into a vending machine and out popped a nice cold Cherry Pepsi. I realized that yesterday I visited the exact same machine...as well as the day before that. This got me thinking. Never mind that sugary drinks are bad for my health, they aren't the best for my wallet, either.
If I skip a daily soft drink and go with tap water, I could put that $1.50 to good use towards my retirement savings. Suppose I deposited $1.50 each day starting at age 30. By full retirement age, those six quarter deposits would grow to $239,873.32!
This highlights the importance of starting to save early. If I wait until age 50 to knock off the Cherry Pepsis, I would only have $27,691.62 by full retirement age (I assumed a 10% annual return, which is close to the long term stock market average).
Of course, you don't really need to sacrifice your simple pleasures to save for retirement. The important thing is to start saving and to do it consistenly over a long period of time.
All this blogging is making me thirsty. Anyone have change for a five? ...in quarters, please.