One of my first posts was about the Tim Horton’s Savings Plan (which was a blatant rip off of the Latte Savings Plan, however, I don’t remember anyone copyrighting that idea), and I’d like to revisit this post.
It is hard to do a straight comparison given that Timmy’s has changed their sizes to match their major competitors sizes (although I applaud that they do actually have a SMALL size, which is called SMALL and not MEDIUM or TALL), but I will attempt to see if the concept still holds water.
First, let’s make some assumptions:
- A Medium Coffee is $1.60 right now (which is the same size as a large was 5 years ago)
- You aren’t buying a donut, breakfast sandwich or even Timbits (talk about free advertising for Tim Horton’s).
- You have 3 coffees a day from Tim’s (a little excessive, but not out of the ordinary either).
- You only buy coffee on weekdays (which again is unreasonable, since if you buy coffee at Tim’s you do it pretty much every day of the year).
So the Calculation is simple:
δ = $1.60 * 3 Times/day * 5 days * 50 weeks/year
Which means δ is about
$1020 $1200 in a year of paying for coffee and such (adds up doesn’t it?). This is up from the $945 when I first kicked this idea around, but that only is about $1.50 more a week.
If we are going to look at this for 10 years with a very slow growth of 2% or so as well you end up with a simple equation for growth every year:
$1020 $1200 + ( δold * (1.02) )
With this in mind the year by year progression:
Year Funds 1 $1,200.00 2 $2,424.00 3 $3,672.48 4 $4,945.93 5 $6,244.85 6 $7,569.75 7 $8,921.14 8 $10,299.56 9 $11,705.55 10 $13,139.67
Thanks to me going with a much more conservative growth of 2% (previously I assumed 5%), but still a worthwhile exercise to see where you are spending your money.
If you smoked just THINK about how much bigger those numbers might be?
And thanks to my reader who pointed out my ARITHMETIC incompetencies, as well!