We’ve all paid ridiculous prices for a soft drink at a movie or ball game, but can you imagine paying $5 for just a cold drink out of a machine? That’s actually what it costs you in lost earnings. If you passed on the soda and invested that dollar instead, it would be worth $5 in twenty years. Think of it by thisthis rule of thumb, $1 equals $5 if it is invested rather than spent. Translated to a larger scale, this means a $20,000 car ultimately costs you $100,000 in lost investment earnings.
Obviously some expenses are necessary and you don’t want to always squelch the present by only looking at the future, but having this basic insight might help you save more than you thought possible. If you can find just an extra $50 per week to invest, you will amass an additional $52,000 toward investments in twenty years (this doesn’t even include your profit through interest earnings). So the next time you rent a movie, remember that $3.50 late fee is actually costing you $17.50.
John Wesley, the founder of Methodism had a saying that went something like this: “Earn all you can. Save all you can. Give all you can, for as long as you ever can.”