There's one realisation I came to myself in my early twenties, which I think most people will when they're introduced to the time value of money, compound inter

There's one realisation I came to myself in my early twenties, which I think most people will when they're introduced to the time value of money, compound interest and savings over time. And you'll find a whole bunch of people talking about it in one form or another, e.g. buffett. And it's quite silly, because the examples take things to the extreme, but there's also a lot of truth to it. It goes a little bit like this: If you do a bit of toothpaste research, you'll find the active ingredients (i.e., the stuff that matters to your teeth) in a tube of $1 toothpaste and $6 toothpaste are pretty much similar. In fact, you can find toothpaste at $0.2 per oz and $2 per oz. Given you brush twice a day using 0.2 oz, that's an annual expenditure of $30 to $300, depending on the type you use. Let's be conservative and say you can save $200 if you buy cheap toothpaste in a little bit of bulk, instead of expensive toothpaste. Average life expectancy is about 80 right now. If you're 20, that means you'll potentially save $200 for 60 years. That's 12 thousand dollars in toothpaste saved, simply by making a conscious decision at age 20 to spend 15 minutes looking up whether cheap toothpaste is effective, and which one to buy. Related to this is the time value of money. i.e., if you look at the past 60 years of S&P500's return, include dividends (reinvested), and adjust for inflation, you'll find 6.5% returns. Let's be conservative and low-ball that at 4%, assuming taxes, other crap and potentially lower future returns. $1 invested today at 4% for 60 years would compound to 1.04^60 = $10.50. As that's inflation adjusted, it ought to mean your purchasing power has tenfolded. If you combine the savings of toothpaste with long-term investments, you'll find your toothpaste purchasing behavior can easily be worth tens of thousands of dollars. Now note, I chose toothpaste because there's no effort or quality-of-life choice to be made there. Buffett enjoys using coffee as an example as saving a $3 morning and evening cup is much more profound than saving 10 cents on toothpaste each day. But it does require you to skip coffee, or make it yourself. However trivial that may be to some, that requires respectively discipline and mental effort to others. But things like toothpaste should be a no-brainer. It's up to anyone in their twenties to consider what actually matters to them, there's tons of such decisions to be made. The brand of toothpaste? Likely not. Brewing your own coffee? Probably not a big deal either. Skipping lunch with friends because it saves money? Probably not a great idea. But even there, being cognisant of the cost of such eating-out behaviour may spark you to invite a friend over for a self-made lunch. The point isn't to save as much money, the point is to allocate your money to where it's actually valuable. That's not toothpaste. It may be working less and spending more time on a hobby, with friends or family.