Financial tip of the day.com - FREEDOM THROUGH FINANCE
Social Sites
  • Financial Tip Of The Day
  • Books
  • Websites
  • Contact Us
  • Disclosure

YOU'RE ONLY AS GOOD AS YOUR LAST HAIRCUT...MAYBE THIS EXPLAINS WHY SO MANY WEALTHY PEOPLE ARE BALD. 

23/8/2013

0 Comments

 
I moved recently and as a result somebody must have stolen my hair trimmer that I use to give myself haircuts.  I know this because I am a man we lose nothing!  Therefore, it is only logical that there is a thief among us, but I digress...

As a result I was forced to exchange cash for the services of a barber in the suburb south of The Villages (formerly known as Leesburg).  This cash outlay got me thinking about how much I've saved over the years by doing this myself.  Or what would be even more fun would be how much would I save over my entire life!  

So here are the assumptions: haircut $10 plus $2 tip, buying a $35 hair trimmer every 5 years, to be conservative assume no inflation for the cost of a haircut, assume a rate of return on your saved money of 7%.  Also, I will assume that you have an employee retirement plan that will match your $144 each year that you contribute (up to age 65 when you retire).  To be more conservative you will not save or contribute any of the tax benefit from contributing to that retirement plan ($36/yr).  

So far I have saved almost $8,000 since high school by doing this.  Here are the 10 year increments of accumulated wealth from this one action.

Age
30: $ 5,685 
40: $ 15,351 
50: $ 34,366
60: $ 71,771 
70: $ 144,466
80: $ 286,226
Death at age of 85: $ 402,333

Note the power of compounding interest.  The ages aren't displayed here, but you will accumulate more money from the age of 75 to 85 then it took you in the previous 57 years of your life!  
 
The whole point of this is not to make you look like Uncle Si off of Duck Dynasty, but rather to point out how seemingly mundane low cost items when given enough time and repetition will grow to incredible numbers.  How many $12 transactions a month do you do and don't even realize it? 
0 Comments



Leave a Reply.

    Author

    This website was created due to the atrociously misguided financial advice that I've heard over the decades.  Financial freedom is not intellectually strenuous, but it takes discipline. 

    RSS Feed

    Categories

    All
    BHAG UPDATE
    College Savings
    College Savings
    Credit
    Economics
    Estate Planning
    Estate Planning
    Financial Planning
    Financial Planning
    Insurance
    Investing
    INVESTMENT JOURNAL
    Mistakes
    Net Worth Update
    Retirement
    Tax
    Thrift

    Archives

    October 2017
    August 2017
    May 2017
    April 2017
    February 2017
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    January 2011

Powered by Create your own unique website with customizable templates.