How packing a lunch could earn you a million bucks

by: - March 4, 2015
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Why is a million dollars so appealing for a basic retirement goal? Following the famous “Bengen Rule,” one can safely withdraw an average of 4 percent from retirement savings each year in order to never run out of retirement funds. A million dollars in retirement assets would, therefore, allow a family to withdraw $40,000 per year, every year. If you pay off your home before retirement, that is plenty of money to pay for food, utilities, travel to see grandchildren, and common medical expenses that come with old age. But where can you possibly find enough money to get a million bucks?

It’s on your plate. At lunch. Every day. Why lunch?

Of all the little things we can culturally spend too much money on, eating out ranks among the top five, in my book. Much like a brunch of two eggs with toast and coffee costs $25, going out with your work colleagues or meeting up with friends for lunch dates is bound to cost you more than if you’d made that food yourself.

Don’t believe me? Most people don’t. But before I show you the math, I’ll clarify exactly why lunch is the perfect time to find enough money to fill a retirement account with a million big ones. Lunch is a daily ritual. It’s a habit. And habits make all the difference between retiring and working until you die.

Can lunch really cost me a million?

Yes. It’s a breathtaking mathematical achievement, but compounding interest turns a $20 meal into $40,000 a year for the rest of your life. Here’s the math breakdown:

The average lunch with gratuity is $20. Some days are more, some are less, so we’ll take the average. Next, we’ll subtract $2.50 as an assumed cost of packing your own lunch. That’s right, people often pay over 10 times as much to have their food cooked for them! This gives us an added cost of $17.50 per work day (and roughly $364.58 per month). Excluding weekends and public holidays, there are effectively 250 working days each year. Multiplying the added cost by the working days results in $4,375 each year for a burrito bowl with extra guacamole and a large drink! But $4,375 still doesn’t sound like a million.


Retirement accounts are for long-term investing. They are arranged so that they accrue value from stock dividends and interest — which is then reinvested in more assets that produce value. This new sum has a larger total value with even greater returns in dividends and interest. This type of reinvestment is called compound interest. While financial advisors vary on what they project a mutual fund or similar investment vehicle could return, 10 percent, over time, is a realistic average.

Using a compound interest calculator, like those available on, you can see how much money you can make by packing a ham sandwich with carrot sticks. Try it! Start with a “current principal” value of $1. Enter the monthly addition of $364.58 (our estimated monthly cost of going out for lunch). If you start saving at age 25 and retire at age 60, you have 35 years to let your lunch money grow. Finally, enter the 10 percent expected average interest on growth, leaving the “compound interest” times per year value at 1. Click “calculate,” and watch how $1,185,748.87 suddenly appears as a projected value of retirement assets! By contributing your lunch expenses to retirement investing, you could become a millionaire.

What about my social time at lunch?

I tend to play it cheap and accept lunch invitations outside the office only when a manager is having a work-approved lunch on the company tab. Recently, I accepted to go along and pay for myself, but another coworker taught me a valuable lesson. He said, “Sure, I’ll come along. I brought my lunch today, so I’ll just bring it with me.” Awesome! He didn’t miss out on the chance to interact with colleagues, and he also didn’t spend $15 to get a bowl of soup, half of a sandwich and a strawberry glazed in subpar chocolate. His food was just as good (if not better), and he still had a good chance to have fun and network with coworkers.

What if I’m closer to retirement?

The best time to start investing in your retirement is now. It doesn’t matter how old you are. The older you are, the more you will have to invest. But don’t let that scare you. Use the calculator and adjust the figures. Remember, preparing for retirement is the only way to actually enjoy retirement.