It doesn’t matter how you look at it, specialty coffee is a waste of money. Which is why I wonder, why does arguably one of the brokest first world demographics, the student, waste so much money on it? Kevin O’Leary has said it before, and I’m going to break it down by the numbers. Suppose 5 days a week, you buy Starbucks, averaging $5 a day, or $25 a week. You do this throughout the school year, which is about 34 weeks a year. This ends up being about $850. $850 might not sound like a whole lot initially, but once you calculate this for 4-5 years of schooling, and then add the interest you could have made if you decided to put it into a retirement fund.

Suppose you invested this $3400 into a S&P 500 index fund which averages a return year-over-year of about 10.5%. If you let your $3400 in Starbucks money ride in that fund for a few decade, the rewards could be quite worthwhile.

Year 1: You would have $3757, which is an annual earning of $357

Year 2: You would have $4151, which is an annual earning of $394

Year 3: You would have $4587, which is an annual earning of $435

Year 4: You would have $5069, which is an annual earning of $481

Year 5: You would have $5601, which is an annual earning of $532

Year 6: You would have $6189, which is an annual earning of $588

Year 7: You would have $6839, which is an annual earning of $649

Year 8: You would have $7557, which is an annual earning of $718

Year 9: You would have $8351, which is an annual earning of $793

Year 10: You would have $9227, which is an annual earning of $876

Year 11: You would have $10196, which is an annual earning of $968

Year 12: You would have $11267, which is an annual earning of $1070

Year 13: You would have $12450, which is an annual earning of $1183

Year 14: You would have $13757, which is an annual earning of $1307

Year 15: You would have $15202, which is an annual earning of $1444

Year 16: You would have $16798, which is an annual earning of $1596

Year 17: You would have $18562, which is an annual earning of $1763

Year 18: You would have $20511, which is an annual earning of $1949

Year 19: You would have $22665, which is an annual earning of $2153

Year 20: You would have $25045, which is an annual earning of $2379

Year 21: You would have $27674, which is an annual earning of $2629

Year 22: You would have $30580, which is an annual earning of $2905

Year 23: You would have $33791, which is an annual earning of $3210

Year 24: You would have $37339, which is an annual earning of $3548

Year 25: You would have $41260, which is an annual earning of $3920

Year 26: You would have $45592, which is an annual earning of $4332

Year 27: You would have $50380, which is an annual earning of $4787

Year 28: You would have $55670, which is an annual earning of $5289

Year 29: You would have $61515, which is an annual earning of $5845

Year 30: You would have $67974, which is an annual earning of $6459

Year 31: You would have $75112, which is an annual earning of $7137

Year 32: You would have $82998, which is an annual earning of $7886

Year 33: You would have $91713, which is an annual earning of $8714

Year 34: You would have $101343, which is an annual earning of $9629

Year 35: You would have $111984, which is an annual earning of $10641

Year 36: You would have $123743, which is an annual earning of $11758

Year 37: You would have $136736, which is an annual earning of $12993

Year 38: You would have $151093, which is an annual earning of $14357

Year 39: You would have $166958, which is an annual earning of $15864

Year 40: You would have $184488, which is an annual earning of $17530

Year 41: You would have $203860, which is an annual earning of $19371

Year 42: You would have $225265, which is an annual earning of $21405

Year 43: You would have $248918, which is an annual earning of $23652

Year 44: You would have $275054, which is an annual earning of $26136

Year 45: You would have $303935, which is an annual earning of $28880

Year 46: You would have $335848, which is an annual earning of $31913

Year 47: You would have $371112, which is an annual earning of $35264

Year 48: You would have $410079, which is an annual earning of $38966

Year 49: You would have $453138, which is an annual earning of $43058

Year 50: You would have $500717, which is an annual earning of $47579

Year 51: You would have $553292, which is an annual earning of $52575

Year 52: You would have $611388, which is an annual earning of $58095

Year 53: You would have $675584, which is an annual earning of $64195

Year 54: You would have $746520, which is an annual earning of $70936

Year 55: You would have $824905, which is an annual earning of $78384

Year 56: You would have $911520, which is an annual earning of $86615

Year 57: You would have $1007230, which is an annual earning of $95709

Year 58: You would have $1112989, which is an annual earning of $105759

Year 59: You would have $1229853, which is an annual earning of $116863

Year 60: You would have $1358987, which is an annual earning of $129134

Year 61: You would have $1501681, which is an annual earning of $142693

Year 62: You would have $1659358, which is an annual earning of $157676

Year 63: You would have $1833590, which is an annual earning of $174232

Year 64: You would have $2026117, which is an annual earning of $192527

Year 65: You would have $2238860, which is an annual earning of $212742

Year 66: You would have $2473940, which is an annual earning of $235080

Year 67: You would have $2733704, which is an annual earning of $259763

Year 68: You would have $3020743, which is an annual earning of $287038

Year 69: You would have $3337921, which is an annual earning of $317178

Year 70: You would have $3688403, which is an annual earning of $350481

After 40 years, you’d be looking at a value of $184,000 minus inflation of about $7500. Scale that up to 60 years, that’d be $1,347,832 after inflation. Investing early in an index fund and letting it ride for life is worthwhile if you have the patience. 20 years from now when you decide to get started with an investment in a fund, the rewards will be a fraction of that.

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