Question
The scenarioto complete both of the tasks that follow. A lot of people love a cup of high-quality coffee (or tea) bought at their favorite
The scenarioto complete both of the tasks that follow.
A lot of people love a cup of high-quality coffee (or tea) bought at their favorite coffee shop on a daily basis. Imagine that instead of buying that cup, you save the money and invest (on a monthly basis, through an app (https://www.doughroller.net/investing/the-best-automatic-investment-apps/) such as Acorns or Stash) into a 50/50 mix of low cost stock index fund and investment grade bonds for an inflation adjusted after-fee return of 6% a year. How much would you accumulate by the time you retire? You will need to make the following assumptions:
1) Come up with a reasonable price for a cup of coffee (or tea). If you don't buy coffee every day, think of some other unnecessary daily or near-daily expense. In any case, you'll need that price.
2) Just add up the total monthly cost you spend on coffee (or something else) - this total monthly cost is your monthly investment (at 6% per year, but you can use 0.5% per month)
3) Determine your retirement date(how many years/months away)
How much would you accumulate by the time you retire?
Step by Step Solution
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