Could ditching your coffee habit make you rich?
PUBLISHED: 09:33 22 November 2019 | UPDATED: 09:34 22 November 2019
It was cool when Kojak carried his coffee in 1970s New York but times change, says Peter Sharkey, and ditching the habit could help you to save.
Who doesn't like a James Bond movie?
For more than fifty years, a series of ice-cool Bonds, from Sean Connery to Daniel Craig, have graced the silver screen, ordering dry Martinis, driving ridiculously fast cars, making improbable escapes and always getting the girl.
The 25th and latest Bond film, No Time to Die, is scheduled for release on April 3, 2020. Within the parameters of a fast-moving, good versus evil storyline, we can expect another combination of superb cinematography, ingenious gadgetry and enough big screen escapism to keep us going until Bond number 26 arrives on the scene.
The Bond franchise generates billions of dollars, so it's reasonable to assume we'll be treated to plenty more escapism over the next fifty years, although it would appear that No Time to Die will be Daniel Craig's last outing as 007.
The same could be said of Bond's super-quick, gadget-packed Aston Martin.
The luxury carmaker, now regularly described as 'embattled' in the financial pages, has not enjoyed a great time since making its stock market debut last year, burning through cash in a manner reminiscent of 007 disposing of gun-toting baddies.
Recently, the company was forced to take out the corporate equivalent of a payday loan, borrowing £120 million at an eye-watering 12% interest. The loan, due for repayment in 2022, will be used to develop and market the firm's new DBX sports utility vehicle, but if orders fall short of agreed targets, the interest rate leaps to 15%.
When details of the £120 million loan was announced, Aston Martin's shares fell to £5.50 apiece; a year ago they were £19.
Borrowing at very high rates of interest is often a sign of desperation, as many folks who have taken out payday loans would attest. Despite charging sky-high interest rates, the much-despised Wonga, once the UK's largest payday lender, generated enormous profits until falling into administration in August 2018.
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The vacuum left by Wonga was soon filled because bizarrely, payday lending at outrageous rates of interest has become the preferred, modern-day alternative to asking your employer (or a mate) for a 'sub' until you get paid, a considerably cheaper option.
Yet there's little doubt that if you want to save money, as opposed to handing it over to a loan shark, you must first rid yourself of expensive borrowing - and that includes credit card balances. Getting started is the most difficult part, but boy, is it worthwhile.
Fortunately, there are other, equally effective ways of saving money, although they too require a little effort to get the ball rolling.
The excess expenditure that always puzzles me (and which is relatively easy to stop) is the amount we spend on coffee. We all know that coffee production costs at our favourite chain are much lower than what we're charged for the end product, yet last year, annual high street coffee sales soared beyond £10 billion.
The number of people you see heading to work holding a cup of coffee continues to rise (this was cool when Kojak did it in the 1970s, but not nowadays), while surveys jokingly tell us that around 20% of folks believe they're funnier and wittier after they've downed their morning coffee fix. How do they know?
Surveys perpetuate a coffee craving, even though making your own coffee at home would save you around £600 a year. You could still carry it to work in a plastic cup if you really must. The likelihood of there being any difference in taste is negligible.
Apart from making your own coffee , Barclays Bank suggested a number of other, comparatively easy ways to save money, insisting that would-be savers have no need to live like hermits: "Think swap, not sacrifice" was the bank's punchline
According to Dr Peter Brooks, head of behavioural finance at Barclays, the simplest way to start saving is to set yourself a goal. He insists that if you know what you are working towards, it's easy to modify your spending in order to achieve your eventual aim. Dr Brooks suggests that if you're working towards a much longer-term target, such as buying a home or saving for retirement, you should make the most of your available tax-free allowance and put your money into an ISA.
Yet there's no need to revolutionise your lifestyle overnight. As you modify your expenditure patterns, they soon become 'norm', making it easier to save for things you want. For the record, the Aston Martin DBX SUV will be unveiled next month; prices are expected to start from around £150,000. That's an awful lot of coffee.
TAM Asset Management Ltd offer savers the opportunity to invest in Investment ISA portfolios comprising a variety of different funds pursuing cautious, balanced or adventurous strategies. For further details, please visit the MoneyMapp website.
For more financial advice, check out Peter Sharkey's regular column, The Week In Numbers.