Hidden Cost of Frivolous Spending

“Heatley, who lights scented candles in every room when he is at home and has a weekly standing order for large bouquets of fresh flowers, says he would be the last person to tell others to forego frivolities in order to save. However, he says, people should be conscious of the hidden cost of their frivolous consumption. The hidden cost is the interest that would have accrued had the money been saved instead of spent. For example, he says, you could shout your family a holiday to Fiji, have a good time and spend $20,000. ‘Great. But if you instead invested the $20,000 at five per cent per annum after tax, twenty years later you’d have $53,000. I’m not saying that people should not go on holidays, but people should know about the hidden cost of their spending. Then again, you could be Scrooge McDuck, never do anything, end up wealthy and then die. That would be stupid.’”