The True Price Of Trendy Coffee by Finance News Bulletin

Published: 13/12/07

A couple of existence ago I was a regular visitor to a broadcasting studio where I noticed the trendy youthful woman on reception would usually have a large coffee mug from one of the many fashionable coffee chainsWhen I asked her why she bought a costly coffee each morning and afternoon instead of buying the equal from the in-house canteen at a discounted 50p, she said it was because it tasted better But faith me, it didn't The in-house coffee was freshly made on the spot from a Gaggia mechanism and was the equivalent of the Starbucks / Caffé Nero equivalent

I suspect the real incentive for buying the coffee was its fashionable status It's the fashion accessory no self-respecting, twenty-something trendy can be seen without these days But when I did a quick calculation of the receptionist's estimated disposable income, the figures were quite frighteninggenerally speaking, I assume the receptionist was earning somewhere around £18,000 a year and taking house around £1150 a month

As she had two large coffees each operational day, this amounts to £136 a monthWhen you take off her likely spend on committee Tax, rent or mortgage, food, clothes, utilities etcetera, this is a astounding percentage of factual disposable income Now of course, there's more to life

and all that -- and for all I know, she may well have been perfectly clever to spend this kind of money without batting an eyelid But judging by the record levels of personal debt around, I suspect not consider me, hers isn't a job you would do for the sheer fun of it

As an illustration, allow's presume she was able to go 'cold turkey' and give up chocolate for high-quality Now let's say she kept that amount of money aside and drip fed it into far above the ground yielding shares paying 6% a day via Motley Fool Sharebuilder* at £150 a month, and re-invested the dividendsAfter five existence, her investment would be value almost £10,000 if the shares remained at the price she originally paid

Take that chilly turkey forward for another five and now we're really talking at £22,600 The figures are a simplified hypothesis, but you get the tipExtrapolating this forward and presuming the youthful lady is now 20, she could amass over £63,000 by the occasion she's 40, just by refusing to buy into the trendy brand mentality in one small area of her day-to-day livelihood, even if the shares had never budged at all Of course, she could be less lucky with the shares, but judging from the past performance of the store market, her luck is more probable to run the other way and the saving be even more pronounced

It may be true that 'a little bit of what you imagine does you good,' but a small bit of prudence can help you out tooIf you fancy building long-term wealth via stock market investing, unlock a assorted Fool Sharedealing account now* We currently have a special present for Sharebuilder All purchases until 31st December are commission-free

In January we'll return to the usual low charge of £150 a purchase We can charge such a near to the ground commission because we transact all of our share purchases at four set points during the monthThe value of your investments and the income from them can go down as well as up

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