My Best Investment
One of the most common questions I get asked by people, when they find out I’m a Financial Planner, is ‘What’s the best investment you’ve made?’
I think there’s an immediate thought from some that being in this business means I jumped on Apple shares in the 90’s.
Whilst I’ve benefited like many from rising stockmarkets and property values, I’m pretty certain on a dollar-for-dollar basis, the answer lies on a bench top in my kitchen.
Not my actual kitchen, unfortunately
When moving from the UK, there were several electrical gadgets which we decided had seen their best days, including our old Espresso machine.
Having been suitably impressed with our brother-in-laws flat whites we bought a Delonghi Magnifica coffee machine as a moving in present to ourselves, when occupying our first rental home in Sydney.
I’d never been a big coffee drinker until my mid 30s, having been raised on the English staple of milky white tea. Asking for a Flat White in most British café’s would see you met with a blank stare and finally an offer of an awful cappuccino.
However, with the abundance of baristas near the old Eluvia offices I would routinely buy coffee during the day and even on the way to work. An easy habit to fall into and my wife would do the same..
Fast forward four years and we are now predominately work from home. On the days we are working in town, we’ve tended to make our first coffees from home using the machine rather than buying on the way.
Curious, as to the relative saving this was making us compared to our old habits, when starting a new bag of beans last month, I kept a tally of usage.
A $50 bag of beans produced 78 ‘Double Shots’ and 6 ‘Single Shots.’
A total of 162 shots at 0.31c per shot.
Each coffee has about 150ml of milk. Our milk costs $4 for 2 Litres, so that’s 0.30c per cup.
Each double coffee therefore costs us 0.91c and each single coffee costs 0.61c.
Add a little electricity and water and we’ll call it 0.95c and 0.65c.
In total to produce all those coffees it’s cost us $137.50
Let’s compare that to $4.50 and $3.50 respectively in a café:
78 x $4.50 = $351
6 x $3.50 = $21
Total = $372
Overall a saving of $234.50 dollars per bag of coffee and we buy a bag on average every 2 months, so $1,407 per year.
The machine cost us about $700 to buy initially so it has more than paid for itself despite at the time it feeling like an awful lot of money to spend on one item.
If I could find a stock or investment property that effectively offered a 200% dividend each year I’d be pretty happy.
When making big purchases, it is sensible to apply this lens to assessing the value. Price is what you pay but Value is what you get.
Sensible investing can do a lot of the heavy lifting to fund your savings and future retirement needs but spending on quality over quantity probably has a greater impact.
And possibly, I just need to drink less coffee.
