Money magazine has five short money math tips in its January issue and I'll be sharing/commenting on them over the next few days. Here's one for today:
What am I giving up in retirement savings when I spend money today?
The math: Add a zero to the price tag. That's what you'd have in 30 years if you invested the money and earned 8% a year. So a $40,000 car trims your nest egg by $400,000.
Puts a new spin on "luxury" automobile, doesn't it? ;-)
Looked at another way, $10k not spent (saved) this year will yield $100k in 30 years. Do this for 10 years, and you'll get to $1 million.