When I first started in the financial services business years ago, I was in a training meeting and one of the instructors told us a story within personal finance that resonated with me. It resonated so much that I made a small change in my life at that time that was consistent with the message being taught, and I think it is time to tell that story again in the hopes that a few others have the “aha” moment that I did many years ago.
The story centered around a young professional, not too far out of college, who had landed a good job and was on a path to success. Like every young adult who strikes out on his or her own, there is a learning curve and a host of experiences that start to mold who we are, what we become and where we place value. Every day on the way into work, he stopped by the local coffee house and ordered a large cup of something highly caffeinated to get his day going. After long hours at the office, sometimes late into the evening, he would grab takeout and eat in the quiet of his own apartment on his couch, an easy and filling way to top off a hard day at the office. The weeks turn into months, months into years and the working life seems to be a breeze. About three years into his job, he decided he would really start to focus on saving for the future. The monthly budget always seemed to work out okay, but he knew that there was very little money left at the end of the month even with a steady paycheck.
After looking through his bank statements, he realized that he had no extra money left at the end of each month and that, some months, he was running in the red for a few days before his next deposit. Frustrated that he had not paid enough attention to what had been going on, he feverishly broke down his monthly budget to see what he needed to work on to help right his financial ship each month.
It should not have been a surprise for him to learn that the morning coffee and the evening take-out was starting to cost him upwards of $25 to $30 a day and, as he added that expense up over the course of a month, it equaled the cost of his rent. What started out as a morning treat for a young professional, over time, became the norm. By brewing his own cup of coffee and drinking it on the way to work, he was able to free up investable money every month. Additionally, by cooking a couple of nights a week and having leftovers one night a week, he was able to cut the take-out portion of his budget by more than half.
The realization is that by making small tweaks to your lifestyle in favor of investing for the future, you can truly move financial mountains for yourself, and the earlier that these changes are made, the more you accomplish. Period. There is a great book that is called The Latte Factor written by David Bach, and it tells a similar story and is a great read for anyone who is trying to figure out how to get started with investing and where to find the money to do it.
Securities offered through LPL Financial. Member FINRA/SIPC. Marzano Capital Group is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance LLC, a registered investment advisor. Independent Advisor Alliance is a separate entity from LPL Financial.
