All posts by KPals

The $1 Million Pack of Cigarettes

cigarettes As part of the Five Ten Twenty Club’s on-going efforts to help its members understand how small daily money decisions can add up to big savings, we are highlighting how spending on simple things can block us from attaining wealth.

Smokers across the world know what it feels like to want a cigarette.. to need a cigarette. It’s one of the hardest habits to break, and while thousands of Americans quit smoking ever year, millions of others wish they could. In fact, a 2012 Gallup survey found that 88% of smokers wished they had never started smoking. After all, smoking wrecks your health, right?

It could also bust your chances at $1 million.

Let’s run the numbers with some quick back-of-the-envelope calculations. For simplicity’s sake, let’s imagine you started smoking at the common starting age of 16 and smoked until your death at around 65 years old. (The CDC says that the average life expectancy for a US man is about 75 years old and also that smokers live 10 fewer years on average than American non-smokers.)

Let’s say you also smoked a pack of day through your years of smoking. Gallup found that about 30% of smokers smoke one pack a day, and that number makes for easier math, so let’s go with it.

The gas station near my home is currently selling a standard pack of Marlboros at $3.79. For simplicity’s sake again, let’s say that this price stays constant through your years of smoking. (Actually, that price will probably go up over time, but let’s not complicate the math further.)

If you smoke a $3.79 pack of cigarettes each day for a year, you’d spend about $115 each month and $1,383 each year on cigarettes. All other things being constant, by the time you were 65 years old, you’d have spent almost $68,000 on cigarettes.

That’s a lot of money, sure, but that’s not the surprise here.

If you had instead invested that same $115 each month for the 49 years that you smoked, assuming an average of 10% per year market returns, that money would’ve grown to over…

$1.8 MILLION!

So next time you feel the urge to smoke, ask yourself, “Who can afford that?”

 

What do you spend money on regularly that you wish you didn’t?

Talk about it and share your thoughts on this post in our Community Forum!

How to Save Big on Groceries at Salvage Supermarkets

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You don’t need a loyalty card or a stack of coupons to save tons of money on groceries this weekend. Big savings can instead be found at your local “salvage” grocery store or grocery outlet. Salvage grocery stores are able to offer extreme discounts compared with traditional grocery stores because they operate on a completely different business model.

Here’s what you need to know about salvage groceries, how they can help save you $5, $10 or $20 a day toward your Five Ten Twenty club goals, and how you can find them in your city.

1) Salvage groceries can sell food to you at a discount because they buy the excess inventories and overstocked foods from other grocery stores at super cheap prices.

Sometimes traditional grocery stores find that they have purchased more food from their distributors than they can ultimately sell at their stores, so they re-sell the extra boxes of Miss Debbie Cakes, Nutella or Diamond nuts, for example, to other grocery stores like salvage groceries. Also, there are other times when items go out-of-season, become lightly damaged during shipment or need to be taken off of shelves after a supplier re-brands its packaging. Whenever these things happen, many grocery stores decide to keep them off their shelves and sell them to a salvage grocery.

2) Salvage grocery stores can offer you great deals but they cannot guarantee that they will always have your favorite brands in stock.

Salvage grocery stores never know what products the other grocery stores will try to sell them, so they can never know what types of products that they’ll be able to sell to you. Salvage grocery stores are great places to shop if you don’t insist on buying the same brand names every time you shop there. As a trade-off though, you’re likely to find great deals on many of the same types of food you would regularly buy and even some great deals on normally-expensive foods that you’ve always wanted to try – but without paying the original full price. Shopping at salvages groceries can also be a lot of fun too, because their products are different every time and you can often discover new foods cheaply!

3) Salvage grocery stores may sell foods past the “best use by” date but they never sell expired food.

Salvage grocery stores do not sell products that have expired or reached their “sell by” dates, because that would be a public safety issue. However, food manufacturers and marketers typically use different labels like “best if used by” and “use by” dates on packaging to tell shoppers when the flavor quality of their foods may peak and diminish. These designations have nothing to do with food safety, so salvage grocery stores will sometimes still sell products that are past their recommended “use by” dates. As a sign of their confidence in the quality of their foods though, many salvage grocery stores offer money-backed quality and satisfaction guarantees for their products.

4) There is probably a salvage grocery store near you.

Salvage grocery stores are pretty common because they offer great value to customers that want low prices and because they also offer great value to other grocery stores that want to sell their extra food to another store. On the west coast, Grocery Outlet Bargain Markets are common and popular in many cities and suburbs. In Louisville, B&E Salvage Company is the place to go, while you could shop at Extreme Bargains if you live near Colorado Springs.

To find one in your area, check out this helpful list of salvage grocery stores across the country found on the website of Brockett’s Extreme Bargains in North Carolina.

Example Five Ten Twenty Club Savings:

According to Gallup, the average American family spends $151/week (or about $600/month) on groceries. Salvage grocery stores typically offer discounts of about 25-60% off traditional groceries; for the sake of our calculations, let’s assume a mid-point of about 40% off. That means you’d save:

Monthly Savings: $250

1- Year Savings: $3000

35-Year Savings: $856,000 (This assumes you invest your yearly savings earning an average market return of about 10%)

Have you ever shopped at a salvage grocery store, food discounter or grocery outlet?

Talk about your experiences there and your other grocery saving strategies in our Community Forum!

 

The 4 Essential Low-Cost Travel Apps

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We know, we know: You’re overwhelmed with recommendations for new apps promising to help you save time and money. That’s why we’ve pared this list down to the four best apps for lowering your travel costs. We’ve downloaded them, taken them for a spin and confirmed they’ll each help you save toward your Five Ten Twenty Club goals. Keep in mind, we’ve intentionally omitted airfare app recommendations. (There are so many great options that we think it warrants a separate post in the near future). Check these apps out:

Beat Cheap/Free Long Distance Call App: Sipergy

Sure, we’ve all heard of Skype and newer competitors, such as Viber, but Sipergy does everything they do – but better. Make long distance calls without roaming charges and get ridiculously low rates on international calls. This helpful little app even helps you find free wi-fi hotspots anywhere you are on earth. Another bonus: Free voice and text translation. Take that, Skype.

Best Discount Hotel App: Hotel Tonight

So you know you want a hip hotel in Los Angeles at a deep discount, but what if you don’t know the city well enough to sift through the hundreds of selections that most hotel booking sites present? If it’s a concise, thoughtful selection of sharply discounted hotels you want, look no further than Hotel Tonight. A word to the wise: You can score outrageously great deals largely because the app only accepts bookings for same-day stays. Your correspondent scored a room at the Ian Schrager-designed Paramount Hotel in NYC for a measly $99. I couldn’t even find hostel beds for that low price on other sites.

Best Low-Cost Rental Car App: RelayRides

Isn’t it great when you visit your friends or family back home, and they offer to lend you their car? Well, RelayRides kinda works the same way: The app enables you to find other people’s cars that they’re willing to rent out at really great prices. The premise of the “sharing economy” isn’t new; it’s also the basis for popular sites like AirBnB. One additional advantage of RelayRides: They’re the only car sharing service now available at airports across the country, so you can now get the convenience of traditional airport car rentals — without the hefty price tag.

Best Low-Cost Gas App: Gas Buddy

You’re driving through a new city in search of cheap gas but don’t know where to go –unless you’ve got the Gas Buddy app. This sweet bit of technology pinpoints the cheapest gas options in your vicinity, making anything from road trips to big-city driving less of a wallet drain. Oh, and don’t forget to put your savings toward your Five Ten Twenty Club goals

Do you use other apps to help you stay on budget while traveling?

Share your favorites in our Community Forum!