Millionaire's Club

[Buddybee]

Ever wondered what all that coffee is doing for your health as well as your wealth?

It actually only works out to 2 coffees per day for hubby and I, and maybe once a week it is 3, but that's quite rare. It's strictly latte with breakfast and latte at morning tea - no afternoon coffee's here (unless I'm watching Le Tour de France - then one is needed in the arvo )

Now that we have it it's an entertainment "tool" as well, so in all fairness while 4000 cups is a lot, it's not just hubby and I consuming - it always gets a workout when friends/family drop over. Our families are quite large when we congreate, so the machine has been known to make 15 coffee's in a sitting on a number of occassions. 4000 certainly isn't reflective of what I'd be prepared to purchase from a store.

As for the health aspects, hubby and I are fit and active mid 30's couple who are within the healthy range of our respective BMI. 2 cups a day isn't too bad - we don't drink Nescafe or any other coffee, only drink green tea and don't drink other caffinated drinks. We also rarely drink alcohol and have never smoked, so 2 latte sized caffine drinks per day in my opinion isn't excessive, but conceed that the wording of my original post would ring some warning bells.

Hehe, that works out similar to my maths:

0 x $3.50 per coffee + no coffee habit = $14,000 not spent

Hubby and I work from home, so technically we don't own the machine - the business does, and it pays for the coffee, milk sugar etc.....so technically it doesn't cost me a cent in my after tax income.

Cheers
Buddybee

 

[BayView]

This is how I see things. Eg, why worry about paying $1.59 at the bowser when it's only $1.53 on Tuesdays...? Do you realise that's probably only $3.60 per week you're worrying about? Not worth worrying about when you could be looking at the bigger picture.

Thinking from the average (or lower) wage earner's point of view - and these are the people who will struggle to get rich - this is only one item in a range of 100's every week that they buy/comsume.

Simply "thinking" of the big picture won't get you there. You have to put some financial rules and practices in place for your own life first, and that involves freeing up as many investment dollars as you possible can, as often as you can, then investing it.

If the average person has the big picture in mind (and most don't - it's usually just an empty dream), but worked harder at sourcing these every day items more cheaply, they would be able to free up 1,000's of dollars per year towards their big picture.

The problem I see on this site is that there is a disproportionate number of people who are not in this income bracket. There are a big number of younger, professional people on well above average incomes who post.

Excellent luck to them!

But these people often don't see the need to adopt this mindset, and can't understand why others do, or should.

You do yourselves an enormous disservice.

 

[INVSTOR]

Congratulations to you and your family Marc. All the best with the new business venture also. When I worked for McDonnell & East in the late 80's every department (clothing, make-up, electrical, etc) were all running at a loss. The only department still making money was the coffee shop. I'm sure with your mindset your business will be very successful also.

 

[ianvestor]

You do yourselves an enormous disservice.

NP, I can understand your POV, but I think anyone who spends brain-time thinking about the small stuff is doing themselves a disservice. I guess it's different for everyone.

 

[BayView]

Congratulations to you and your family Marc. All the best with the new business venture also. When I worked for McDonnell & East in the late 80's every department (clothing, make-up, electrical, etc) were all running at a loss. The only department still making money was the coffee shop. I'm sure with your mindset your business will be very successful also.

Retail I reckon would be very tough; especially in this day and age of internet sales, long interest free terms, more competition etc.

Using my industry as an example; when I began my training as a golf pro, the only place you could buy golf equipment was at a pro shop on a golf course, or the odd sports store at places like Chadstone.

The amount of retailers in the phone book covered 2 pages. Now it covers stacks of pages, and there are "off-course" shops everywhere, and the golfing population has not increased much (if at all) since the early '80's - despite what everyone thinks. I am only still involved in golf becuase it's what I know, and I can make a living out of teaching.

I certainly would not want to go back into the retail side of it now. It would require more working hours for not a lot of income. Bugger that.

I think of the retailers in the fields you mentioned - now you have Harvey Norman, The Good Guys, Retravision, Clive Peeters and so on and so on. There are many more now than there were 20 years ago, and one of my mates was a Retavision franchisee until just recently, and he was saying that is it not worth selling things like toasters anymore - no margins.

This is why I think service industries are more attractive nowadays, and you can create a niche more easily; create a point of difference. The business we are going into isn't just a coffe shop though. This is one small section of the business. The cafe and take-away is approx 30% of the turnover. The main business is the restaurant and the receptions (weddings in particular).

This is more service orientated, and part of the uniqueness is the setting and location of the premises - it's very in demand. No one else can replicate that, so it is unique, and if the service provided is top quality, then the business can charge a good price without fear of competition.

 

[Witzl]

The problem I see on this site is that there is a disproportionate number of people who are not in this income bracket. There are a big number of younger, professional people on well above average incomes who post.

Excellent luck to them!

But these people often don't see the need to adopt this mindset, and can't understand why others do, or should.

You do yourselves an enormous disservice.

Is $60,000pa above average? I thought it wouldve been about average....

 

[steveadl]

NP, I can understand your POV, but I think anyone who spends brain-time thinking about the small stuff is doing themselves a disservice. I guess it's different for everyone.

My thoughts also.

If you're on a small to average income, then what LA's saying makes sense, it's just never been my focus. I focus my attention more on growing my assets/income as opposed to saving the income I'm spending. If I grow my income by 2%, it makes much more of a difference than saving 10% on all my purchases.

When looking at it like that, saving even $50pw on odds and ends doesn't amount to much. But to other people it would. People just need to ensure that they're not spending all their effort and focus on saving that $50pw if it comes at the detriment of working out ways to earn more, get a second income, develop a passive income or other ideas that would potentially serve them much better.

 

[weg]

That's awesome!

Reaching 1M is a huge milestone, and I'm sure the next few Mill will just be a natural progression.

As replicarockstar said, I also take in your posts and look up to the way you go about, not just investing, but your general take on things.

Well done .

 

[WBG Redcliffe]

Well done on the 1st of many, its great reading this type of post.

 

[BayView]

NP, I can understand your POV, but I think anyone who spends brain-time thinking about the small stuff is doing themselves a disservice. I guess it's different for everyone.

It depends where you are on the path to riches I suppose.

The 18 year old straight out of school looking to save for the first IP needs to have the "latte factor" mindset, unless they are on $150k as a first job. But even then many of these kids just blow it. I know a jockey (plays golf at a Club I worked at) who at 17 was making over $100k per year.

He's now about 26, and owns a car, and wears cool clothes all the time, but that's it. One fall off a horse and he's gone. No career, and broke.

The problem with people like this is they tend to have a bit of a "bullet-proof" mentality; they'll always earn the big dollars and things will be fine, life's great so let's go shopping and hang the expense. People like this tend to take their eye off the ball with their finances.

Losing your job and your health is, unfortunately, all too easy and very unexpected, so why not expect the best, but plan for the worst?

The 40 year old on $200k PAYE per year, with half a dozen IP's under his belt (this is a very small minority of the working population I might add) probably doesn't need to shop at Aldi's rather than Coles to save $30 per week towards their investing plan (although, we still do this for most grocery items - but we're not on $200k PAYE per year).

It's all about setting the goal, and looking at what steps are required to get you there - sooner.

If you keep "nickel and diming" yourself on useless waste, then you will still get there; but at 45, but not 35.

Once you're there, then you can go mad and doodad your head off.

Having said that, we have still managed to live a nice lifestyle (albeit with some delayed gratification - no Beemers or plasmas or jetskis (yet)), and accelerate the wealth.

I just think it's sensible to get it all; accelerate the wealth practices, AND have a good lifestyle at the same time through your "latte factor" habits.

To neglect one is to sacrifice the other I reckon. The guy who puts every cent into their IP portfolio will have less lifestyle, while the guy who pays little attention to the "cashflow leaks" will limit their wealth building capabilities.

 

[vimbite]

Congratulations...I will Spread the good news..Awesome one!!!! nice Job bro...

 

[gerd.]

LAA thats a Great foundation to have in place.

The second Mil will be easier because you have to work for the first one.
Once the second Mil is attained Mr & Mrs can be millionaires on the same day.



For those that are consumer orientated

IF as much energy was put into making money as most people put into saving money they would be miles ahead in accumulating wealth.

One % on 10 items will give you 10% this is quite achievable compared to trying to get 10% saving on one item.

Consistently tilting the odds in your direction regardless of how small will have a compounding affect. Over time that will accelerate your portfolio to levels most people cant imagine.

Gerd

 

[Rob Williams]

Consistently tilting the odds in your direction regardless of how small will have a compounding affect. Over time that will accelerate your portfolio to levels most people cant imagine.

Which is something Casinos have always known and have built fortunes on. It can work for us, too

 

[Piston Broke]

Just found this thread.
Congrats! Well done!
I wish you many , many, many more!

As for thrift, everyone has there own likes & dislikes.
My only criteria is that i try to "spend" my money not "blow it".
I see nothing wrong with spending money on yourself after you made it, ie not borrowed.
If your favorite form of relaxation is watching TV, and you've made some good investments, you've watched your spending and saved lots, then spending 2K on a LCD or Plasma imo is good. It will make your "relax" time more enjoyable, and keep your mind fresh. Same if Golf is your passion.
Generally these items will be a long term purchase, so it's really a matter of quality over price. A good set of clubs will last many years (more than the cheap ones), and you'll enjoy your golf more as well.

It's about goals, and just as you set goals of having 10 IP's, setting goals for long term lifestyle items should be the same. As long as they are items that will be used and enjoyed.
If you feel you need to buy a $1,000 guitar to learn to play, I'd say that's waste. But if you have been playing for a few years, and think your going to be playing for many more, then set an investment goal with as reward a $1,000 guitar. Or whatever you have a long term passion for.

These days you can get a Merc S320 2002 for ~$40K. This car sold new for >$200K!
So if you've done a few developments, built & sold a few duplexes, and made a few hundred K's, what's wrong with a nice $200K Merc for $40K? Bloody bargain I say. Much better than Coffee & smokes...probably cheaper too.

 

[kph]

If you feel you need to buy a $1,000 guitar to learn to play, I'd say that's waste. But if you have been playing for a few years, and think your going to be playing for many more, then set an investment goal with as reward a $1,000 guitar. Or whatever you have a long term passion for.

These days you can get a Merc S320 2002 for ~$40K. This car sold new for >$200K!
So if you've done a few developments, built & sold a few duplexes, and made a few hundred K's, what's wrong with a nice $200K Merc for $40K? Bloody bargain I say. Much better than Coffee & smokes...probably cheaper too.

Can't agree with this more.
Lashed out and got a 540i a couple of yrs back. Not quite a 2002 model but it cost a whole $10,700 and totalled approx $15,000 by the time it was freighted from Melbourne to Perth and the mechanic went over it from top to bottom. List price when new was $144,000 (nuts!!)
Bullet proof engine and transmission and it just goes ....

Now for the guitar... time to live a little.

 

[Trogdor]

Can't agree with this more.
Lashed out and got a 540i a couple of yrs back. Not quite a 2002 model but it cost a whole $10,700 and totalled approx $15,000 by the time it was freighted from Melbourne to Perth and the mechanic went over it from top to bottom. List price when new was $144,000 (nuts!!)
Bullet proof engine and transmission and it just goes ....

Now for the guitar... time to live a little.

Interesting topic! I've often wondered if car technology moves fast enough so if a 2000 luxury european car costing $150k would be better than a 2008 local made car costing 40k (brand aside).

A lot of features on cheapish cars today were only available a few years ago on v. expensive models.

What has your experience been?

 

[kph]

In my opinion they're better value.
The thing is so highly optioned that I don't use 90% of it.
Self dipping rear view mirror
Rear park sensors
Auto windscreen wipers that go into intermittent mode when you stop at lights
Electric everything
5 speed auto
Self cleaning oversized disc brakes ( the speedo runs out at 260 kmh so it needs some stopping power!!)
Over the top trip computer with all sorts of sensors
Some sorta traction control in the transmission ( I think for snow)

HUD & SAM ..Heads up display and surface to air missles ( No... thats on the F111)

But seriously, it would be a direct comparsion with a late model Commodore I suppose and I know which one is more fun to drive.

The road is long...

 

[HiEquity]

Can't agree with this more.
Lashed out and got a 540i a couple of yrs back. Not quite a 2002 model but it cost a whole $10,700 and totalled approx $15,000 by the time it was freighted from Melbourne to Perth and the mechanic went over it from top to bottom.

That's excellent buying kph - pretty hard to find a deal like that.

 

[BayView]

Can't agree with this more.
Lashed out and got a 540i a couple of yrs back. Not quite a 2002 model but it cost a whole $10,700 and totalled approx $15,000 by the time it was freighted from Melbourne to Perth and the mechanic went over it from top to bottom. List price when new was $144,000 (nuts!!)
Bullet proof engine and transmission and it just goes ....

Now for the guitar... time to live a little.

Excellent result.

This is the sort of thing I often spruik about.

It's not being cheap, or tight, because you are still living the lifestyle, but you have saved yourself many tens of thousands of dollars - a deposit on an income producing asset no doubt.

 

[Bandita]

Finally made it through the entire thread!!

Congrats L.AAussie!! What an achievement! I know the background of your strategy from your posts (which is actually very similar to ours I believe) - but have you ever laid the entire strategy out in a post somewhere - and how you got to this $1M mark? I'm sure many would love to read it!

Cheers,
Jen