That Cup of Starbucks is Killing Your Financial Future
Apparently, some of you have not listened to me…
Why do I say that?
I say it because of the zillions of dollars Americans are spending at Starbucks for very expensive cups of coffee. Starbucks (NASDAQ: SBUX) just reported its second quarter results and they were very, very strong.
Good for them, but bad for you…
Why Good for Them?
SBUX revenue hit $6.82 billion, which was well above the $6.67 billion Wall Street was expecting and 26% more than the same 90-day stretch of last year.
That’s a LOT of coffee!
Profits of $1.37 billion. Yup… $1.37 billion of profit in just 90 days! And that’s up from $852 million in the second quarter of last year.
That’s impressive, but Starbucks says its business is only getting better. Starbucks raised its full-year forecast of revenue to increase another 7% and upped its profits forecast from $2.75 to $2.79 per share to a range of $2.80 to $2.82.
That’s consistent with the rising consumer confidence numbers. The Conference Board, a private research company, reported its index of consumer confidence jumped from 124.3 in June to 135.7 in July.
I don’t tell you this because I want you to buy shares of Starbucks stock, but to once again try to hammer home the point about making savvy decisions with your money.
Why It’s Bad for You…
Consider these numbers.
If you’re spending $5 a day at Starbucks (or any other store-bought caffeinated beverage), that works about to $1,825 dollars for the entire year.
That’s a lot of money!
If you were to instead sock that cash away into your 401(k) and earn 10% on your money, you’d end up with about $343,000 over a 30-year period.
Thats right! Just one simple change in your spending habits will accumulate to one-third of a million dollars.
And if you supplement that habit with other money-saving habits like dining out one less time per week, driving a less expensive car or buying a slightly less expensive home, you’re talking about a nest egg worth well over a million dollars.
I’m not talking about living like a monk. I’m talking about living a little less high on the hog.
By doing so, you can become a millionaire.
For most (excluding the low-income poor) of us, the problem isn’t that we don’t make enough money. The problem is that we’re not good at managing what we make.
It’s like the politicians in Washington D.C.
The government doesn’t have an income problem. What the government has a spending problem.
The same is true for you.
If you’ve socked away 15% of your income into your 401(k), avoided debt, and lived within your means…
You’re well on your way to a rich retirement and perhaps many years earlier than you ever expected.
But this road to riches starts with one simple move.
Ditch that fancy cup of Starbucks coffee and get on the fast track to retiring a millionaire.
Here’s to growing your wealth,
Chief Income Expert