I blogged last year that I was thinking of investing some money into Premium Bonds as I felt I had enough in equities and not enough ready cash – but I couldn’t stand the thought of cash just sitting in a bank or savings account, earning virtually nothing. Arguably Premium Bonds had the chance of earning me something.
To my delight, my numbers came up last week and I won twenty five quid! Now that’s the kind of prize I like, because it’s total treat money. It’s the kind of sum I can spend without guilt or perceived “opportunity cost” that a win of say, five hundred quid, would bring about. If I won that amount, I’d probably invest it, although possibly in a speculative punt on a single share purchase like Rolls Royce. And if I won five thousand, most of that would definitely be squirrelled away into further investments.
I once actually did win five thousand pounds, on the Littlewood’s football pools. I was young then, just married a year, and we blew it all on a fly drive holiday to California. What a fantastic experience that was. Do you realise, however, that if I’d invested that cash wisely enough to return me 10% over all those years, that five grand would now be worth £60,278.73? Well, to quote those Californian legends, Metallica, so ****ing what? I didn’t regret spending that money then, and I don’t pine over that “lost” sixty grand today (I tell myself in my most adamant, and hopefully most convincing, tone of voice!)
I do sometimes wonder about the common story on FIRE blogs about the Starbucks Latte – you know the one, that if you didn’t spend that three pounds every workday then you’d save fifteen quid a week and over seven hundred pounds every year. Well, you can’t argue with the arithmetic, but it depends on how your coffee adds to your quality of life, doesn’t it? What would you pay to brighten your day? If that Starbucks latte floats your boat, then surely three quid a day is a bargain compared to going without it? Of course, if it does nothing for you whatsoever then why in God’s name are you buying it in the first place?!
In a way, I’m glad I didn’t discover the concept of FIRE until about five years ago, because I think I might have been swayed by that Starbucks analogy had I thought about it. These days I actually have the opportunity to indulge in this habit on a daily basis because there’s a Costa Coffee in the small market town where I work. About twice a week, I leave the house early, drive to work before the traffic becomes annoying, park up, head into the near deserted coffee shop, order up my latte, download The Times to my Ipad and enjoy some quiet time before work. It’s great, and I could easily do it five times a week – except for the fact that I’m thinking “Seven hundred quid a year! On coffee!?”
So I do have some spending thresholds these days that might prevent me from spending a five hundred pound prize on myself. Twenty five quid though, that’s a totally manageable windfall, arriving without fear, guilt or loathing. That’s a bottle of seriously nice wine for Saturday night. Or two (I can’t tell the difference between wine at a tenner a bottle and wine at twenty, except psychologically). Mind you, I couldn’t drink two bottles of red these days in the same evening without totally ruining the next day. Or maybe a it’s trip to The Fisherman’s Wife in Whitby with my DOH on a quiet evening, with its view out to the sea and an effectively free fish and chips? Or it’s a few decent books on the Kindle or, even better, a hardback book to fuel retirement dreams? A Moleskin notebook would be another guilty pleasure to indulge in, without the feeling that I was being ripped off and a bit of a pseud to boot. Perhaps a more manly purchase would be this handy wee Leatherman C33 with its twenty five year warranty? I’d want to spend it on something that I might otherwise apply the twenty four hour rule to, but at this level I don’t find the challenge too difficult. It seems to me that I’d agree with The Beatles that the best things in life are free, but the second best things aren’t really all that expensive either.