NOTES FROM THE WILD
I make my own builders tea either at home or at my desk. So, the guilt trip around buying a coffee a day has always been aimed at someone else's cup. My Achilles heel is a matcha latte, which I discovered in Australia. But PNG cafes have yet to put them on the menu.
But back to the guilt trip. Skip the daily coffee and you'll retire rich. David Bach made it famous in 1999 as the latte factor, his name for the small spends you could do without. It's an odd thing to say in a country that grows its own arabica in the Highlands.
The sums are simple. A K10 coffee five days a week adds up to K78,000 over thirty years. Invested at 7 per cent a year instead, the same money grows to roughly K264,000. The maths holds up.
What bothers me is where it points. A coffee is easy to see. Interest on a loan is harder to spot, and it costs far more.
Picture Joseph, a mechanic in Mount Hagen. He borrows K18,400 from a formal lender to buy a second-hand ute, at 3.5 per cent a fortnight, a rate lenders here have charged. He repays K900 every fortnight. When the loan clears, in under eighteen months, he has paid about K14,500 in interest. That's more than five years of weekday coffees, gone on one loan.
What's your Achilles heel, and who gives you the guilt trip about it? Write back and tell me.
TOMORROW
The replies you’ve sent over the last four weeks.
Best
Amanda
P.S. What’s your view on today’s newsletter? Did I miss something out that you’d like to share? Write to me, [email protected]. I may not get back to you, but I will try to read what you send in.
IMPORTANT NOTE
Wild Money is general information only, drawn from my own experience and research. It isn't financial advice, and nothing in it is a recommendation to buy, sell, hold or manage money in any particular way. What worked for me won't necessarily suit you. Please seek advice from a licensed financial adviser before making decisions about your own money.