Thriving Millionaires

By Eric

I work in an office where the norm is to, at about noon, ride the elevator down to the cafeteria, survey the food options prepared on-site, settle for what is available, and then get in line to pay for the meal – all the while complaining about both the quality and the cost of the food.

I, on the other hand, when the hands on the clock read twelve, head to the refrigerator on my office floor and grab my lunch box. Why do I break the social norms and bring my own lunch? For me, it’s simple financial calculus.

In a non-scientific survey of my co-workers, the average lunch cost at our cafeteria is about $7. Assuming about 250 working days in the year, that equates to nearly $1,800 per year spent at the office cafeteria. When I compare that to the cost of bringing my own lunch (I spend about $1.50/lunch I make at home, so I’ll call it $7/week) – I’m saving close to $1,500 per year.

While this amount doesn’t seem significant, the impact can be seen when visualized over the course of multiple years or an entire career:

Assuming $1,500 saved per year (ignoring inflation for purposes of this simple example), and a 7% return on the savings by investing the difference in the market, over the course of a 25 year career in an office, I will have saved nearly $100,000 vs my co-workers who purchase their lunch each day ($95,000 to be specific). If you plan on having a career closer to 30 years, the differential expands to nearly $140,000.

I’m not suggesting that you should pack your lunch every single day nor should you ignore requests from co-workers to go off-site for lunch occasionally. It can be critically important to your career to ensure you have face time with your peers and managers, both officially in meetings and unofficially at things like daily lunches in the cafeteria. I’m only recommending that you consider the alternatives to seemingly standard daily expenses.

While I know I do receive a few sideways glances from co-workers for always being that guy who brings my lunch, I shrug it off, smile, and say that I’m paying for my children’s college one sandwich at a time. And, frankly, the math shows that the statement isn’t probably too far from the truth.

Patrick’s Thoughts:

As someone who regularly purchases lunch in the cafeteria, I think I’m one of the best people to respond to Eric’s thoughts above. While I agree with the principle of what he’s saying, I don’t think the message needs to be taken literally. The key point he makes is about evaluating the long-term implications of seemingly small, daily transactions.

When I think more literally about his example, I’ve thought similarly about my daily lunch and have come to a slightly different conclusion. First, my job usually includes 1-2 free lunches a week that come from meetings, so I really only need to plan for lunch about 3.5 days a week on average. I also have found some pretty good deals in the cafeteria ($3.19 chicken salad wrap anyone?), and love how I can add a whole bunch of veggies to my sandwich for free, something I would have to purchase if I brought my lunch from home. In my mind, this is a phenomenal value, and on average, only costs me $11-12 a week. I would have a hard time bringing something that delicious from home for that cost.

What’s important is that we’ve both created solutions for the same problem: not evaluating the profound impact regular, everyday, small purchases can have on your long-term finances. I look at some of the people around me at work, and it’s not uncommon to see people purchasing a $10 salad or bringing in a $4 cup of coffee everyday. By bringing my own coffee, or avoiding the extras at lunch, I decide to save money everyday.

Unfortunately, that alone is not enough. You must also make the decision to put that money to work for you. It’s great if you can find ways to save a buck here and there, but if you just go spend it elsewhere, you haven’t done anything with future financial implications. In a future post, we’ll share with you some great ways to do that.