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Tim Horton Savings Plan?

Look at that “Double Double” you have sitting next to you. Ever thought about how much those things cost you? I have asked you this question before, so you should know the answer. Let’s have some fun Monday Arithmetic, shall we?

1. Assume you drink 3 “Double Doubles” a day for five days (what you do on the weekend is your trouble, not mine). How much is that costing you a week then?3 * \$1.39 * 5 = \$21.00 per week
2. You work how many weeks? I’ll say 45 weeks to make it easier to calculate for me. So that means you are spending about:45 weeks * \$21 / week = \$945 per year on coffee
3. Over say 10 working years assuming you took that money and made a lump sum payment every year into an investment vehicle that paid a modest 5% (remember, if you put it in an RRSP you’d get back tax money too).
 Year Value 1 \$945.00 2 \$1,937.25 3 \$2,979.11 4 \$4,073.07 5 \$5,221.72 6 \$6,427.81 7 \$7,694.20 8 \$9,023.91 9 \$10,420.10 10 \$11,886.11

So after 10 years you’d have almost \$12,000 in your pocket (less taxes on the growth, unless you do this inside of an RRSP). Does that coffee seem so cheap now? Hey, you folks drinking at Starbucks and paying twice as much for your coffee want me to do the calculations on THAT for you? Tim Horton Savings Plan , think about it!

Tim Horton’s Savings Redux

After reading this over it is a bit simplistic. This is a suggestion, it should not be a major part of your financial plans. If having less Timmy’s coffee is going to be a major change in your financial life, you have bigger problems.

Feel Free to Comment

1. If I’d been wise and bought some THI late last summer when everyone was crowing about how far it was falling from it’s IPO, I’d be up 33% now. If I’d bought the IPO, it would still be a respectible 19.5% return.

This seems like one of those “buy what you know” stocks, especially for folks in central Canada who may see the expansion of the franchise south of the border.

I’m gonna be rich once I learn how to invest retroactively in the marketplace!

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