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What’s up everyone!
How’s it going?
Had a very interesting discussion at lunch with some work colleagues today.
As you all know, we live in Sydney, Australia – an absolutely amazing place to be.
Unfortunately that awesomeness is offset by the supreme cost of living, quid pro quo as they say!

And this was the topic with my colleagues.
One of them recently had a baby, and he was telling us about a trick he is employing for their future.
Well, it’s not necessarily a trick but more of a life hack.
Basically the guy loves Bubble/Boba teas, often guzzling 3 or 4 a DAY.
So once he had his baby, he’s started to implement a new rule.
He would drink one less tea and instead deposit $10 into a savings account daily.
The savings account would be completely different to his everyday account.
Out of sight, out of mind.
And once he reaches retirement age of 70 in 40 years time, he’s going to present this as a gift to his child.
Simple and effective plan!
Though you know how much he will have at the end of it?
$10 * 365 * 40 = $146,000
But wait!
He will be earning interest on any sum deposited in the savings account.
Even if we assume a 2% savings rate… that figure rises to over $223,000.
Who woulda thought! It just highlights the brilliance of compound interest.

Compound interest has been described as the 8th wonder of the world.
But the results are truly phenomenal the longer your time horizon is.
It doesn’t even have to be applied to finances.
I’m always amazed at how knowledge can be compounded, from an absolute beginner to amateur, to semi-pro turned professional.
Or results at work, just by working an extra 1% harder/smarter than everyone else.
Or with relationships, how much stronger they are because you are always working on them.
Conversely, a toxic relationship will progressively get worse, laziness at work will eventually be found out, and you’ll eventually pay for ignorance.
Oh! And of course, it applies to personal finances as well, neglect and naivety will cost us BIG time in the long-run.
So come on guys! That first step of personal finance doesn’t have to be difficult.
It can be as easy as drinking one less sugary drink a day!
What’s stopping you?
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20 Comments
Norma
Interest analogy between interest, work, and relationships. Just by working an extra 1% harder/smarter than everyone else we can get much better results.
The Frugal Samurai
Yes exactly, might not see the result after a day, a week or even a month, but after a couple of years it’d be pretty astronomical!
Chad
This is amazing! 226k from only a daily saving of $10…Fascinating and I am on it for real. Thank you so much.
The Frugal Samurai
No problem, good luck with it!
Olya AMANOVA
Many people need help when it comes to managing personal finances. Your article gives a pretty good view on how to start mindfully living in harmony with money related topics – that may seem scary sometimes.
The Frugal Samurai
Thank you for saying so… just wanna break it down and make it not seem so hard!
Kuntala Bhattacharya
Thats an interesting discussion of how you can save bits for your child’s future. Loved the ideas. In fact I feel we must not over spent money just for luxuries. Instead save it for future.
The Frugal Samurai
Yes, just start with one small step right. Just shows it doesn’t have to take a monumental effort for personal finance!
Celebrate Woman Today
I love the simplicity of your approach and attention to the Action part. Just do one tiny step at a time.
The Frugal Samurai
Thanks for saying so and for reading!
Sachea Around The World
This is such a great way to easily breakdown your finances
The Frugal Samurai
Thanks for reading it!
Maartje van Sandwijk
What a great way to save money! 🙂 Definitely something to think about implementing!
The Frugal Samurai
Hoping we can all do it long term! Thanks for reading 🙂
Laura
You make it seem so easy 🙂 Thank you for sharing this great post with us x
Laura
https://pinkfrenzymissl.blogspot.com/
The Frugal Samurai
All good Laura, hopefully you took something away from it, thanks for reading!
Kathy Kenny Ngo
I totally agree. It’s as simple as cutting down on something like a hot drink and choosing a simpler option. Small savings turn into big savings.
The Frugal Samurai
They really do don’t they! Thanks for reading, what are you thinking of doing?
Kiwi
I tell my friends all the time less coffee lattes/drinks during the week will save money. Even eating out every week will save a LOT of money!
The Frugal Samurai
I couldn’t agree more! Honestly, every tiny bit counts in the long run.