An Extra Dollar a Day For the Rest of Your Life

How much more would I need to have saved up and invested to spend an extra dollar a day indefinitely?

What spurred this question? A packet of Planters Spicy Nuts and Cajun Sticks. The meeting had a generous food budget, and in addition to hearty breakfasts and delicious lunches, we also had snack breaks, and this snack mix was some of the best I’d ever had.

How much bigger would my nest egg have to be to enjoy a little bag of this nut and sesame stick concoction every day guilt-free? Well, at 310 calories, it’s not exactly a guilt-free treat, but you can substitute whatever healthy or unhealthy small indulgence that costs about a dollar a day.

An initial online search told me that a dollar a day should cover it, although I could see via CamelCamelCamel that the 72-pack could sometimes be had for under $40, and I eventually bought them in bulk at just over 50 cents apiece.

The Less Than $64,000 Question

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This is a math problem, and it’s a pretty easy one to solve. We’ll start by using the 4% rule of thumb developed by William Bengen, confirmed by the Trinity Study, and now followed by millions of retirees with sizable nest eggs.

The idea is that you should save 25 (which is 1 divided by 4 percent) times as much as you plan to spend in a year when retired. When invested in a reasonable allocation of diversified stocks and  bonds, the odds of running out of money within 30 years are quite low, and you’re more likely to end up with more money than you started with.

Now, if we want to add the mini-splurge of a dollar-a-day deliciousness that can be found in a little blue Planters pouch, we need to save up enough to afford to spend another $365 a year. How much is that?

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