If you start out early in life saving just $5 per day, you could very likely retire a millionaire. ($150 per month, invested at 8% for 50 years, would add up to $1,189,759) If you spent the same $5 everyday on a latte, you could end up with zero. That’s why a lot of finance books and blogs tell you to skip the latte and invest the $5 instead.

Balance Instead

This sounds like pretty logical advice, but there is a reason I say “Don’t Skip the Latte”. Part of prospering is finding a way to afford some of the nicer things in life, while also steadily accumulating wealth. It’s not an either or situation or what investors call a zero-sum game. It’s perfectly reasonable to want and expect both.

If I had saved all of the money I spent camping and travelling over the past 20 years, I would likely already be a millionaire right now. But, would my life really be more prosperous? I don’t think so. In fact, I know so. If I had accumulated a million dollars but had to forgo all of the wonderful experiences from my past 20 years, it would have been a very poor choice. I can always earn and spend more money, but I can never get those 20 years back. My children are grown, my health is less resilient and that time is gone forever.

How to Balance

There is a reason I don’t look back and regret all of the money I spent on entertainment, instead of saving and investing. I took a balanced approach to my finances and it has paid off. I chose to save a percentage of my income first, then I live joyously on the rest. Over the years, I was able to increase the percentage I saved from 5%, 10%, 20% and now 30%. My ultimate goal is to save at least 50% of my net income and still live a fabulous life. The secret to prosperity is balance. If you Pay Yourself First, you will never be remorseful about how you spend the rest.

I’ve had times in my life where I couldn’t afford a latte and still afford to save, but that was a long time ago. I’m notoriously cheap and have made my own daily coffee for decades. Now, I’m enjoying the benefits of years of saving and paying down debt. But, if I want to travel somewhere or have a nice meal, I’m not going to skip the latte. I’m going to enjoy it thoroughly.

The Bottom Line

The bottom line is at some point in everyone’s life, time will become more precious than money. In order to live a prosperous life, you should balance life’s wonderful experiences with the accumulation of wealth.

“Lost time is never found again”

– Benjamin Franklin