$5.00 a day for Starbucks, or $5.00 a day for Retirement?

When I imagine how I am going to spend the rest of my life, my plan does not include working until 65 or 70.  Most Canadians are not saving into their financial plans early enough in their life, and the retirement age is increasing dramatically. 

How much money do you have for retirement? 

How much do you think you will need in order to live comfortably?

Did you know that the earlier you invest in the future, the greater returns and more money you will have later in life to actually enjoy them? 

Think of what your simple pleasures in life are, and how much they cost you. Some people find pleasure in smoking cigarettes ($10.00 avg per pack), some have a tanning pleasure ($40.00 a month) and others find pleasures in gym memberships or yoga studios ($40.00 to $100.00 a month). 

Lately I have begun a love affair with a Grande, Non Fat, No Water, Tazo Chai Latte from Starbucks.  This costs me a wonderful low cost of $5.00 a day.  No matter how much money I have in my bank account, I am always able to afford my $5.00 a day for my guilty pleasure.

If YOU can find $5.00 a day for something that is a guilty pleasure, then YOU should be able to find $5.00 a day to invest in to YOUR FUTURE. 

If you have not started a RRSP contribution plan, make that your number one goal for the month of March.  It is time to start paying your self first, so set up a monthly “PAC” which is a pre-authorized contribution into a Registered Mutual Fund...it can be as little as $50.00 bi-weekly.  But as your income grows – so does your contribution amount. 

Find out if your company has a Group Plan, or a contributing Group Plan – and use it.  Set up an appointment with your HR representative, your bank, or friends and family to discuss what you should be doing. 

If you are over the age of 21, then I mean YOU!

If you have contributed into investments by the age of 25 on a yearly basis, between the ages of 45 to 55 your investments will annually be compounding the most amount of interest and you will see the savings grow.  Now if you wait until the age of 35 to start contributing – even if you put more money into your investments on a yearly basis, you still will not see the annual compound until you are 55 to 65.  On average, those who start contributing at a younger age, will make more interest over the term – and will be richer, faster. 

Finally, when you invest, you gain the benefits of tax refunds!  Who doesn’t like money back from the tax man at the end of the year?

Take that money and either INVEST or MAKE A LUMP SUM TO YOUR MORTGAGE.

You can make a lump sum payment on your mortgage every year up to 15% (check with your financial institutions %) of the original amount of your mortgage.  Or you can make smaller payments in the min. amount of $100.00.

So here are my goals:

1. I am going to increase my PAC tomorrow with my Advisor and set up a meeting to review my “financial life plan”
2. I am going to put $30.00 on a Starbucks gift card, and that is my allowance for the month.  I will be limiting myself to 6 Grande Non Fat Non Water Tazo Chai Lattes each month
3. My 2010 tax refund will go directly onto my Mortgage this year

I wrote it, so I am doing it. 

I will stop investing in my Starbucks guilty pleasure, and start investing into my financial future that will actually pay me back at retirement.

What is your plan?  Do you have $5.00 or even better $10.00 a day to invest into your future?

 
"These opinions are entirely my own and do not represent TD's position, strategies or opinions".