Small changes that can bring big results
Over the past few years I’ve often written about cycling, losing weight, getting fitter and generally becoming more active. So I’ve decided this week to write about finance, something I know precious little about but wish I’d made a few better decisions over earlier in my life! However, as I always say, ‘you can’t put a price on a good time,’ and I’ve had countless ‘good times!’ We all have differing financial situations but I’m going to make the assumption the majority of readers can probably save the cost of a cappuccino each day. With the average price of a medium cappuccino at £2.60 this would equate to an annual saving of £949. If this £949 was invested in one of the top 50 performing investment trusts for 10 years on average it would become £2,575. If however you left the money in the fund for 20 years it becomes £6,988 and £11,516 after 25 years. So, what if you continued to forgo your cappuccino each day year after year? Here are the numbers: 10 years - £18,918; 20 years - £67,687; 25 years - £117,684. Obviously this assumes the investment trust keeps performing at an average return, however the illustration is remarkable. Whilst this is impressive, it’s probably also a little unrealistic, however it does demonstrate that saving a small amount regularly can amount to a worthwhile sum of money. The other way of saving money is to reduce your financial outgoings. Are you paying the cheapest price for your, gas, electricity, oil? Do you buy petrol when you see a cheaper priced garage than your nearest? Do you tend to buy branded goods (many ‘own label’ goods are made by popular brands and considerably cheaper!) A few smarter choices can save us all a lot of money, combine this with saving a bit and before we know it, in the words of Del Boy, ‘one day we’ll be millionaires’. Well... probably not, but we will be much better off than we are. Small changes, big results, it worked for Sir Clive Woodward and his England team in 2003 when they won the Rugby World Cup.