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By author Morgan Jassen on wieldsilver.com

2020-07-17 22:18

An Exact First Step Towards Paying for Vacations with Interest

“If we use interest to pay for vacations, then we'll fancy ourselves very clever and officially thriving.”¹

HOWEVER. Right now we have about 0 silver-grams per year of interest flowing to us.

No worries, financial literacy empowers us! We will still do it! We'll make a financial plan, do it, then iterate! Go! Sizzle! We love vacations, vacations rule!

For our interest, we'll use stock dividends.

And for our vacation, we'll use a micro-vacation goal of "go out to coffee with friends". Coffee (or ice cream) with friends is a vacationy- type of thing. Like a mini- vacation building up to a big vacation.

Here's a price scale to help with perspective:

A 12oz. cup of coffee ---> 4 silver-grams.
Coffee with friends ---> 16 silver-grams.
a 20lb. bag of rice ---> 36 silver-grams.
Dining out with friends ---> 100 silver-grams.
Overnight shared lodging ---> 293 silver-grams.
Week vacation with friends ---> 6,973 silver-grams.

So how many SBUX shares would one need to own, in order for the shares' yearly dividends to pay for "coffee with friends"?

1 share of SBUX would produce (4 x .69 = ) 2.76 silver-grams per year at current December 2019 dividend rate, therefore I would need 6 shares of SBUX stock to flow 16 silver-grams of dividends per year.

So, if I save (6 x 145 = )870 silver-grams and use that to buy 6 shares of SBUX stock, then by year-end I will get 16 silver-grams worth of dividends from those shares. And then I can take my friends out to coffee! Woo hoo!

Uh, but, 870 silver-grams is like 6 weeks' worth of groceries for a family of 4. It's like going out to eat with friends 9 times.

How might one sock away that much worth of silver-grams within a reasonable time?

If I can save 3 silver-grams per day then at year-end I will have 1,095 silver-grams, and *before year end* I will have the target 870 silver-grams. 

So aim for that! Very realistic and feels doable. 

In conclusion, an exact first step towards paying for vacations with interest, is to invest 3 silver-grams per day into SBUX stock.

¹ This is laid out in "Interest Pays for Vacations with Friends - Wieldsilver.com First Post" https://wieldsilver.com/2020/blog/2019-11-29-interest-pays-vacations-first.html

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