“Pay yourself first.” Treat your savings like a mandatory bill and pay yourself at least one hour a day of your income. – David Bach, author of the Automatic Millionaire
“Don’t go to Starbucks today for a coffee… Invest $5 a day for 40 years @10% and you’ll have $948,611 in savings in your retirement account. The fact is that investing works when you work it.” – David Bach
I know that skipping the latte is a part of the latte factor philosophy, but sometimes I just need a cappuccino!
Therefore, I found other things to cut back on in order to find more ways to save and invest that money.
It seemed better to indulge and splurge on the things I really wanted and then cut mercilessly the things I don’t like.
This meant paying off debt.
I rather cut out shots at the bar at happy hour on Taco Tuesdays than not having my coffee or tea fix!
I mean everything is good in moderation, right?
You should be able to sip coffee and buy stocks.
My niece (Tiana) even bought me a juice shot at Trader Joe’s recently. She said, “shots on T”. She also likes to say Tiana runs on Dunkin. She loves her coffee. And she occasionally likes juice shots too.
Some were pretty pricey. I guess I can just eat the fruit and drink water to save on that. Who needs $5.99 juice shots? That should still count as saving on unnecessary drink spending. I mean a drinks a drink, right?
Lately, I have noticed that everything is behind a paywall. So I started cutting out or avoiding subscriptions.
Most movies and shows end up on Prime or Netflix anyway. I will catch it eventually.
Sacrificing present pleasure for future security is how the game of financial independence is played.
However, I can recollect hearing many stories of financial mismanagement. It’s a tale as old as time.
Hollywood Child Stardom gone bust
One of my all time favorite child actors is Shirley Temple. She was wise beyond her years. An absolutely incredible talent for such a young age. She started out by taking dancing lessons and then also starting her career at age 3. By age 6, she was one of the biggest stars in Hollywood.
Shirley Temple, a beloved child star who made 29 films by age 10. Talk about a work ethic! All that just to be fired in 1941 by Fox Studios at the tender age of 11 for slumping ticket sales. Her contract was picked up by MGM, but by 1950 her Hollywood movie career was over at the young age of 22.
At the peak of her career, Shirley commanded a salary of $10,000 a week, earning her a healthy $3.2 million along with other income from merchandise.
She didn’t live a fairy-tale existence. During the years of her greatest fame, she worked punishing hours, received death threats and inappropriate advances, and retired at 22 with just $40,000 in the bank.
Ninety-seven cents of every dollar she made was gone. Due to bad investments made by her father.
Shirley Temple Black was an American actress, singer, dancer, politician, and diplomat, who was Hollywood’s number-one box-office draw as a child actress from 1934 to 1938.
Childhood Earnings: During the 1930s, she was the highest-grossing star in Hollywood, earning roughly $3.4 million. However, by the time she was 22, the vast majority of these earnings had been squandered or lost in poor investments managed by her parents.
Adult Rebound: Despite losing her childhood fortune, she rebuilt her wealth through strategic business endeavors, marriage to wealthy businessman Charles Black, and a highly successful career in international relations, serving as the U.S. ambassador to both Ghana and Czechoslovakia.
Estate & Assets: Her estate included high-value personal property, most notably a rare 9.54-carat “Fancy Deep Blue” diamond ring. The ring was purchased by her father in 1940 for about $7,200 and was auctioned off post-mortem by a private buyer for an estimated $25 to $35 million.
At the time of her death in 2014, Shirley Temple had an estimated net worth of $30 million. Her wealth was accumulated through her legendary childhood acting career, successful adult ventures, savvy real estate investments, and a prominent second career as a United States diplomat.
Her story taught me something. Never to give up.
If I wanted financial independence, I would have to work for it!
I drove my old car from college into the ground. Paying that off along with a $20,000 personal loan that cost me $333 a month, helped me get on more solid financial footing.
Paying off debts laid the groundwork for what was to come. Amassing $580,000 in investments. I am mere thousands away from $600,000.
Although I did not cut out tea and coffee, I did cut out luxury cars and personal loans from my budget. The $750 I was saving on these two line items alone far eclipsed the $50 budgeted monthly for my caffeine fix!
I won’t stop until I hit my target of $1 million. I am more than halfway there.
Let me reward myself by taking a sip of my coffee.
About the author
Miriam started Greenbacks Magnet in 2016 to keep a scorecard of her goal of $1M in investable assets. Armed with a Master in Management (MiM) and a calculator, she teaches readers how to achieve financial independence while also helping them learn how to smell the roses along the way. The palpable response she got from sharing her personal finance goal in a public speaking course at Georgetown University encouraged her to share her story and teach finance on her website. She invests in AI companies as artificial intelligence is the new iPhone of the moment as she likes to invest in companies that are disruptive.