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http://finance.yahoo.com/news/cable-tv-retire-early-17145118...

Cable TV or retirement - you decide. How much does a lifetime of cable cost? While the cost of monthly cable packages varies significantly, the average is about $80 a month. Multiply that cost by 50 years and it totals a whopping $48,000. If you think that number is alarming, wait until you see the next one.

If you invest that $80 a month in a low cost S&P 500 index fund that returns 8 percent annually, the amount grows to an eye-popping $638,000. That's a lot of dough to pay for 500 channels of TV most people will never watch. If you can bump up your returns to 9 percent, the number grows to almost $1 million.

</snip>


intercst
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Now, if we could just come up with a low cost S&P 500 index fund that returns 8% annually we'd be all set!
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Multiply that cost by 50 years and it totals a whopping $48,000.

I'm not sure I understand how investing in anything for 50 years allows you to retire early.
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Now, if we could just come up with a low cost S&P 500 index fund that returns 8% annually we'd be all set!

Don't forget that you'd also have to start paying for cable TV from the day you were born. If you wait until you're 20 to start paying for your own cable, 50 years of bills gets you to age 70 - hardly an early retirement.

By my calcs, 30 years of $80 per month compounded monthly at 7% gets you just under $100k in your nest egg. Don't get me wrong, that's still a tidy sum - and a good example of what a small savings over a long time can do - but hardly enough for an early retirement on it's own.

--Peter

PS - And we haven't begun to talk about what that $100k will actually buy 30 years from now.
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DoLoop writes,

Now, if we could just come up with a low cost S&P 500 index fund that returns 8% annually we'd be all set!

The S&P500 index fund I use returned 32% last year and 8.5% annualized over the past 30 years.

https://personal.vanguard.com/us/funds/snapshot?FundId=0540&...

intercst
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The S&P500 index fund I use returned 32% last year and 8.5% annualized over the past 30 years.

https://personal.vanguard.com/us/funds/snapshot?FundId=0540&......

intercst



... the fund that you linked does indeed show a 32% return for 2013 but the fund also has an 11/13/2000 inception date with an average annualized return of 4.41%.
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ravvt writes,


... the fund that you linked does indeed show a 32% return for 2013 but the fund also has an 11/13/2000 inception date with an average annualized return of 4.41%.

</snip>


Good point. I linked to the "Admiral Shares" of that Vanguard fund with a lower expense ratio and higher minimum investment.

Even the Investor Shares of the fund with the drag of higher expenses has returned 11.04% annualized since its inception in 1976.

intercst
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PS - And we haven't begun to talk about what that $100k will actually buy 30 years from now.

If one expect to earn 7% on the Cable TV savings, it seems reasonable inflation might be 3.5% - which over 30 years is merely a factor of 2.806

That means an item which cost $35 today would cost $98.24 -- hence the nice $100K pile of money will melt away a bit faster - like 2.8 times faster.
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Don't forget that you'd also have to start paying for cable TV from the day you were born. If you wait until you're 20 to start paying for your own cable, 50 years of bills gets you to age 70 - hardly an early retirement.

I read the article more as saying that if you plug small leaks and eliminate things that are not important to you in favor of retirement savings, you will get further ahead than you can imagine.

I think a lot of people have a tendency to look at small expenses as being insignificant, and don't realize that they can really add up. I think the cable was just an example. In my house, for instance, we have basic cable and don't pay for any premium channels because they have no value for us. Others may decide those premium channels do have value, but they don't mind not buying the fancy coffee and make theirs at home instead.

I read the article as saying that understanding your own values and priorities and applying that to your own budget/expenses will help you to trim the things that bring no value and add that money to your long-term savings. That, I think, is a good message.
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<I read the article as saying that understanding your own values and priorities and applying that to your own budget/expenses will help you to trim the things that bring no value and add that money to your long-term savings. That, I think, is a good message. >

Agreed, short read to the point good article. Many could benefit from this advice early in life, I sent it to my kids. The power of compounding! awesome!
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I read the article more as saying that if you plug small leaks and eliminate things that are not important to you in favor of retirement savings, you will get further ahead than you can imagine.

Absolutely.

It's January-time to fix everyone so there are how to fix finances articles galore. This one is retread of the Latte Factor.
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2gifts: but they don't mind not buying the fancy coffee and make theirs at home instead.

For those wanting to cut their coffee expense while getting a SUPERIOR java:

Tim Ferriss describes the perfect cup of coffee:
http://www.huffingtonpost.com/tim-ferriss/how-to-make-the-pe...

The Aerobie Aeropress coffee press is $26 at Bed Bath and Beyond. And I use my old blade grinder (Ferriss recommends a burr grinder), to grind it 'fine'. This method REQUIRES one to be actively involved in making the cup of coffee.

If one just HAS to have push-button coffee... this aint it.

But it IS consistently GREAT coffee, using HEB $7/lb beans.
http://www.hebshopping.com/home.php?xid=d9fe36682fad5080d0c7...
this page shows $9/lb... but, HEB OFTEN has sales.

I also buy coffee that is already ground and 're-grind' it to get fine ground.

FWIW: the Aeropress is not absolutely necessary... heating the grounds for 30 seconds, then passing them through a sieve, adding cardamon produces 'Turkish' coffee. There will be some fine grounds in the bottom of the cup.


aerobie at BBBY
http://www.bedbathandbeyond.com/store/product/aerobie-aeropr...
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I think a lot of people have a tendency to look at small expenses as being insignificant, and don't realize that they can really add up.

And why is that? Mebbe because they are told so by financial "experts".

http://www.bankrate.com/finance/savings/money-myths-3.aspx

"People need to stop always looking at the expenses portion of their budget. … It is usually the shortage of income that gets people into trouble," Cardone says.

Psst. Stay on that treadmill. There is massive amounts of consumer goods you NEED!

Those who want to have a large nest egg need to stop thinking in terms of trading time for dollars, Siebold says. Instead, acquiring wealth is a "nonlinear process and comes from generating ideas that solve problems," he says.

In fact, most fortunes can be created almost overnight, if you have the "right idea at the right time," Siebold says.


Psst. Stock trading is the path to riches! [at least for your broker]

Cardone agrees. He says that many middle-class money woes don't stem from big spending, but from not enough income being generated by members of the household.*


I know several divorced people with excellent income that were unable to keep the spending of former spouses. In the end it became a deal breaker.

I read the entire article & couldn't find any explanation on why Cardone was an expert. Or even what he did for a living.

I did find there is a Grant Cardone on CNBC. He is a super salesman. His books:http://www.amazon.com/s/ref=nb_sb_ss_i_1_13?url=search-alias...

*What I find interesting is that he does have a problem with federal government spending & throwing more taxpayer money at any problem. I dunno seems inconsistent to me.
http://www.youtube.com/watch?v=SkXddQyHwlE


Read more: http://www.bankrate.com/finance/savings/money-myths-1.aspx#i...
Follow us: @Bankrate on Twitter | Bankrate on Facebook
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I read the article more as saying that if you plug small leaks and eliminate things that are not important to you in favor of retirement savings, you will get further ahead than you can imagine.

I absolutely agree, and clearly didn't say that well enough in my previous post.

My main objection is just to the thread title. I think it's misleading. And that takes away from the otherwise good message.

--Peter
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Before one cuts the cable, they have to ask themselves what else they would do to pass the time if they cut it. If it means going out more and spending more money to remain entertained, it could be a pennywise, pound-foolish decision.

That said, for some folks most of what they are paying for (especially if they aren't sports fans) can be replicated by cutting the cable, ditching the dish and using streaming sources like Netflix, Hulu and Amazon Prime in addition to over-the-air ("free") TV. A combination of these would probably be less than $25 a month, and that assumes taking all three which might be overkill. We are really close to doing this now, but our Internet (small town DSL, really the only non-satellite option) isn't reliably fast enough. If it improves or we get other options that make it workable, the dish can't be ditched fast enough.

#29
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We are really close to doing this now, but our Internet (small town DSL, really the only non-satellite option) isn't reliably fast enough. If it improves or we get other options that make it workable, the dish can't be ditched fast enough.


You won't regret it. I cut the cord over 10 years ago and never looked back. TV is a huge waste of time and money.

My GF moved in with me in November, and she hadn't yet seen the light. I was able to negotiate no cable, IF I could still get her the majority of her shows by other means. I bought a $70 digital antenna so we get all the broadcast channels in 1080p HD (better than cable in some areas). Netflix + Amazon Prime + Hulu got me the rest of the way there. She still doesn't have access to some of the crap, like Kardashians and The Bachelor, but that's OK; I think it's a great opportunity for her to catch up with her girlfriends at their apartment using their cable. Mission accomplished.

The book Cognitive Surplus is an excellent and short read on what a profound waste of time and resources television has been in this country in the last 50 years:

http://www.amazon.com/Cognitive-Surplus-Technology-Consumers...
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Cable TV or retirement - you decide.

Or substitute dinning out, gym membership, books, X round of golf, anything else one does for recreation/relaxation.

Its a balancing act, save for the future but live in the present.

JLC
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PS - And we haven't begun to talk about what that $100k will actually buy 30 years from now.

My guess is a month of cable TV.

Bob
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