When you spend money on things you don’t need, you’re creating what businessman and Beanstox Chairman and co-owner Kevin O’Leary calls “ghost money.” Typically, these expenses are tied to impulse buys, memberships you don’t use, and other unnecessary things that might seem small, but add up over time.
However, those same small expenses, if invested, could add up. Let’s look at that extra streaming service subscription you have at $9/month. If you were to cut that service out of your life right now and invest the money, you’d have invested $108 after a year. Keep investing that same amount over 30 years (at an assumed 8% annual growth), and at the end of that period, you could have over $13,000.* Not bad for missing out on a couple must-see series. The best part? As you invest more money, your expected returns could also increase.
This isn’t to say that you should go off the grid, cut out all joy from your life, and squirrel away money. Small changes like the example above can have a large impact on your financial future. The trick is to condition yourself into making those decisions more often, then following through with your plan to invest.
*This projection assumes an annual rate of return of 8% (including reinvestment of dividends and excluding fees and taxes), and keeping the funds invested throughout the investment period. Returns are estimated annualized returns, assuming a properly diversified portfolio. This projection does not reflect fees, or the cost associated with investing. Learn more about fees. It is not indicative of past performance or any client’s experience using the Beanstox app.