Last night I met with a colleague of mine who said she didn’t have any money to invest in her retirement. As it turns out, within five minutes I found several instances where she was believing her own lies. The biggest one? Her car costs as much as her mortgage… that’s nuts!

Mortgage ($810 mortgage + $140 property tax)
$950 / month

Car ($465 payment + $250 insurance + $240 gas)
$955 / month

After a minor adjustment to a more modest yet still new car, she will be downgrading her car, reducing her insurance and gas burden and saving $435 / month or $5,220 / year. Invested over the next 10 years and earning average returns she’ll build up a nest egg of $83,365.92 as a result of her “sacrifice” and she’ll be able to retire 2 years earlier.

If she continues this trend for an additional 10 years (or twenty in total) she’ll have built up a nest egg of $281,729.37 enabling her to retire 5+ years earlier.

If she continues this trend for an additional 20 years (or thirty in total) her nest egg will be a whopping $753,721.53 and she’ll be able to retire at 55 years old with more than enough money to live frivolously for the rest of her life.

What is vital to recognize here is that the “sacrifice” that she made was simply not driving a luxury car. She can still continue to drive an “ordinary” yet brand spanking new car, drink her coffee every day, eat out several times a week, buy her pre-made luxury meals, etc. Even without sacrificing anything else in life, this one tiny adjustment can and does change the entire outcome of her financial future.

Anyone can do this. This is not out of anyone’s reach. Ordinary people do extraordinary things each and every day, one small action at a time. What most people don’t realize is how truly extraordinary the impact of this seemingly minor “sacrifice” can have one one’s financial future. Like her, I hope others take note, where you stand in a decade or two is entirely up to you.