Coffee to Car Payments

Quit Smoking Your Nest Egg!!!

Been looking for a silver bullet or magic pill?  Try the Sticker Shock Method of quitting.  Thanks to my girlfriend, Sheri, for taking my crude spreadsheet and turning it into the lovely calculator you see here.  All you have to do is enter the amount you paid for your first pack and your age then, your age now and current cost and how many packs per day.  The calculator will tell you how much you will spend on your habit between now and retirement age of 65 based on an annual price increase calculated from your inputs.  You know how it goes.  Every time the state passes a new cigarette tax increase, you scream "That's it!!  I'm quitting."  Maybe you do but then you bum one from a friend.  Then you bum another.  Then you're embarrassed for bumming so you buy a pack.  The tax increase wasn't that big of deal after all.  No matter how ridiculous the results look on here, remember they are based on what has already happened to you. 

What age did you start smoking?
How much did you pay for your first pack?	$
How old are you now?
What do you pay per pack today?	$
How many packs/day do you smoke?
Annual Price increase:
Years projected into the future:
By the time you retire at age 65, a pack will cost you:	$
for a total annual cost of:	$
By that time you will have spent a total of:	$
which, had you invested earning 7% would be:	$

Not a bad nest egg.  Is it?  Well, that's the real cost of your next cigarette.  The spread sheet I referenced above was one that I put together for myself based on my own addiction.   The cost of my next cigarette is $178,238.93 and if invested means close to half a million bucks for me in retirement.  After calculating it for myself, I wanted to provide the same resource for other people who may be trying to kick the habit and could be motivated by money. 

Are You a Rancher or a Dairy Farmer?

If you answered "vegan", go ahead a read this anyway.  I'm just trying to make a point.

Yesterday I attended a meeting of the Cash Flow Investors Group here in Des Moines.  It is a great group of individuals who meet to share ideas and learn together how to become financially independent.  The "lead learner", Jeff, was presenting ideas on cash flow and introduced an analogy I found very intriguing.  He was comparing how differently a rancher and a dairy farmer make use of the exact same asset, a cow, to produce different results.

A rancher raises cattle for the sole purpose of selling them for their meat.  A rancher will spend anywhere from 3 to 5 years feeding them, keeping them healthy, and fattening them up for the big payday.  The primary motivation is capital gains.  The herd is all about numbers.

A dairy farmer, on the other hand, takes care of the herd, pampers them, and makes sure they are comfortable and happy so they they will produce milk regularly for 7 to 9 years.  During this time, the dairy farmer is generating income from the milk.  But guess what.  25% of all the beef consumed comes from dairy cows.  So, just like the rancher, the dairy farmer still has their big payday too when they take the cows to market that are no longer producing milk.  Their primary motivation is cash flow and producing income but they still get the capital gains and held on to the asset nearly twice as long.

Focusing solely on capital gains is a "rancher" mentality.  It makes a lot more sense to me to look at your money as a vehicle that will get you where you want to go.  Look at it like a dairy farmer looks at a cow.  How can you make your money produce an income stream for you and still have an asset that you can sell later on for even more profit.  Treat your money with respect and protect it and it will take care of you.

Dairy farmers click here to contact me.