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Monday, June 14, 2010

Drink Your Way to a Million Dollars

Every year, well over $60 BILLION is spent on bottled water.

Somehow, people around the globe have been convinced to spend big money on water. Thirty years ago, the market for bottled water was almost non-existent.

My hat is off to the marketing geniuses at Coca-Cola and the other large bottlers who have cleverly managed to convince Americans to spend hard earned cash on a product that we used to get for free.

The really bizarre thing is that these people think they are getting value for their money- like bottled water is somehow better than plain old tap water- which is really amazing because a huge chunk of the bottled water sold in this country IS TAP WATER- municipal water repackaged and heavily advertised (sometimes they run the tap water through a filter first).

Just for fun, read the labels on some of those bottles. They'll usually have a fancy name like Aquafina Dasani Refreshing Energy Water- but if you look on the label, in really small print, you'll likely see something like "made from filtered City of Cleveland municipal water"- ummm, delicious!)

It's NOT "better for you." It is NOT "more pure" (for many years, the standards for tap water were more stringent than for bottled). It's just water in a plastic bottle (and the chemicals from that plastic bottle may be leaching into your water- umm, chemicals).

I'm not even going to get started on the environmental damage done by people buying bottled water, because this blog is supposed to be about money, and I could rant for a couple of pages on that subject alone.

I don't think a lot of these people even think about how much money they waste on the stuff. Prices of bottled water vary significantly, but you will likely pay 50 cents or more per bottle.

Drink just 2 bottles a day, and you end up paying $365 a year. I know that doesn't sound like a lot to most people, but little expenditures add up over the long haul. If you had chosen to drink tap water instead of bottled water, over a 45 year period (the number of years a typical person works), you could have saved about $288,000 (assumes a 10% return on investment in a tax free retirement account).

Making little savings like this can be the difference between retiring penniless or retiring as a millionaire.

Think about all the other places you spend small amounts of money every day. Do you order the $2 iced tea or soda with lunch rather than drinking the free water? Do you buy a $4 cup of Starbucks coffee rather than drinking the free coffee at work? Do you spend $6-10 buying your lunch every day when you could brown bag your lunch for a dollar or two? Do you pump a couple of bucks into the snack machine every day?

These are the kind of little expenditures people make every day and don't even think about.

Lets say you just spend an extra $5 every work day- maybe $1 on bottled water and $4 on that triple-shot hazelnut lowfat frappucino grande vente latte frappucino (or whatever those things are called- I don't speak "Starbucks" language very well).

$5 every work day x 250 work days per year= $1,250 per year.

Using the same assumptions as last time, if you'd avoided these expenditures and invested the money instead, you'd have $988,494! Lets round it up and call it an even $1 million.

Yes, that's right, just by choosing free tap water and free office coffee over bottled water and fancy coffee, you could drink your way to becoming a millionaire!

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