The Latte Factor

“Save now. Fewer trips to the café now can lead to more vacations later,” says Fidelity.

“Figure out your ‘latte factor’, be it your frequent lunches out, your fetish for new shoes, or your everyday coffee, and minimize it or cut it out entirely,” says the man on CNBC.

This seems to be a common theme with the retirement gurus. Skip the coffee, save a few extra dollars for later. It makes sense, right? 5 dollars a day for coffee can lead to an extra 1500 dollars plus in your savings account. To me it does make sense, and to one friend whose dad’s motto is “save today, spend tomorrow” but not everyone agrees with us.

I spoke with one friend who when I suggested she start saving money now, said, “Why worry about later all the time when you should be thinking about having fun right now?” At first I thought, “Wow, she is so naïve! She is going to be screwed later!” Then I spoke to my Dad, who was the one that first taught me how to save. He said, “Sure, cut out your latte now and then, but don’t deprive yourself of all fun now by always worrying about later.”

Dad saves the day again. Leave it to him to impart some words to the wise regarding finances. Save now, sure, but have fun in the meantime. What is the point of saving all your life if you are not going to get to enjoy it? I am not saying that I am going to die tomorrow, but…what if I did? Would I be happy with my life so far? Would I wish that I had blown a little more money on shoes instead of scrimping and saving for my non-existent retirement?

No way! I am going to do it all! I am going to have fun now. AND save for later. It will be mine. Oh yes, it will be mine.

My Very Own Pot of Gold

Last night I couldn’t sleep and I was watching a show on CNBC on how to “Retire Rich”. There were some good tips and it got me thinking a little about whether or not I am following the correct path. Will I be able to retire rich?

According to the show, 70 percent of Americans live paycheck to paycheck. Seventy percent! That is a lot! And of the remaining 30 percent who are not living that way, are they investing and saving wisely?

So today I went to Google to find out more about the subject. According to The Motley Fool, it is simple to retire rich. You can do it in five easy steps and here they are:
1. Start now.
2. Save more.3. Take full advantage of employer contributions.4. Allocate your assets to make bank in the stock market.5. Don't rely on someone else to do it for you.

Ha! So it is easy! Then why aren’t we doing it? I think it is because many people are not being educated about this early on in our lives.

Not only did my father teach me to work hard and to put my money in the bank while I was in high school, but I also got much of the above advice when I was 18. I had just started a new job where they had pretty good benefits. At that time, they would match 50 cents to my dollar, up to 6 percent. A good family friend told me to invest 10 % of my paycheck (at this time, I was making about 5 dollars an hour). I wouldn’t miss the money in the long run, it was being taken out pre-tax and my company would match 6 percent of it. What did I have to lose? He also suggested putting part of it in high risk and part of it in low risk (at the time I had no idea what that meant). Luckily, I listened to him. Thanks Mike! Ten years later, I am still investing 10 % of my paycheck and I have built up a fairly good portfolio.

There is still a lot that I have to learn. I am still hesitant to put too much money in the stock market, I sometimes pick mutual funds with the “eeny-meeny-miny-moe” method, I haven’t rolled over my 401K, I am scared to buy property and I am quite conservative, even for my age. However, I think that, little by little, I am starting to learn what it takes to…retire rich.

Do you have what it takes?