If you follow me on social media, you likely already know that I love to cook and bake. But did you ever think that it could make you a millionaire? Believe it or not, it can. Let’s talk about how eating out adds money to corporate pockets by taking it from yours. And how learning to prepare good food at home can generate enough savings to become a millionaire.
What It Costs To Eat Out
First a word on the costs of eating out. As a family of five, including a teenager who no longer qualifies for kids meals, eating out is expensive. It was always more expensive than eating out than it was to eat at home, but feeding a family makes it even worse. It seems like we can’t get out of even an inexpensive restaurant for less than fifty bucks – and that’s at a chain restaurant with relatively inexpensive food.
At work, people will routinely drop a few dollars on breakfast, $4-$7 on one or two coffees, and $7-$10 on lunch. That’s somewhere between $15-$20 per day on food. And this isn’t once in a while – I’m talking about people doing this every single day. Those same folks routinely go out to eat, and take their families out to eat, multiple times each month.
Lots of the food people buy is processed in some way. By processed I don’t mean canned or frozen – I mean transformed into something that it wasn’t originally. Oats become oatmeal packets; strawberries become jam; and wheat becomes bread.
Processed food not only usually tastes inferior to homemade, but is also much more expensive, and full of stuff you might not want to be eating. Having someone else process your food for you also doesn’t allow you to tweak recipes to your liking. For example, when making food at home you can add wheat flour to a traditionally white flour recipe, replace fats with applesauce, or put in less sugar or salt. When you instead buy a processed food, you’re stuck with whatever recipe the manufacturer wants to use.
And don’t even get me started on food allergies. My oldest son had dairy, egg, and nut allergies from the time he was an infant to when he outgrew them by the age of five, and processed foods were the worst things for his allergies. Back then, I frankly couldn’t afford to buy “allergy free” versions of most foods – they were too expensive. Instead I learned to make them all dairy/egg/nut free, and kept up the habit after he outgrew his allergies.
Value Add – Profit Add
When you’re thinking about buying thing, one thing to keep in mind is that every time a company “adds value”, they add profit to their pockets and take money from yours.
What’s “added value”? It’s whenever a company transforms a product from its natural state into something else. So when apples are made into applesauce, the company has “added value” to the apples by boiling them for a while. Possibly also adding some cinnamon, or sugar. They then add those expenses to the cost of the base product, the apples, add their profit and sell it to a distributor. That distributor then transports that applesauce to the grocery store, adding their own profit. At the grocery store they again add their own value (profit), then sell it to you.
By that time, compared with buying some apples from a farm near you and boiling them for twenty minutes, you’ve contributed to the profit of at least three entities.
The same is true of restaurants, but on steroids. Lets say you want to buy a kids meal at a typical restaurant. It might come with a juice box, mac n’ cheese, applesauce, and some ice cream for dessert. Now not only has each individual product maker already “added value” by:
- Transforming apples into juice, then boxing it, and shipping it
- Making wheat into pasta, milk into cheese, and that cheese into powder
- Boiling apples into applesauce, packaging it, and shipping it
- Turning milk, eggs, vanilla, and other ingredients into ice cream
- Likely also including coloring, artificial flavors, and preservatives along the way
So not only are you incurring the cost to have each item prepared for you, but you’re also then incurring the costs of the restaurant. The cost of food is actually only between 28-35% or so of a typical profitable restaurant. On top of that, you have to add labor costs for the cooks, wait staff, managers, etc., as well as the overhead of the restaurant building.
Let’s say you eat at a different kind of restaurant – less boxed juice and mac n’ cheese cheese for the kids. Instead, you have more more upscale, local, farm to table style food. The plus on this is likely less processing, and less artificial stuff in your food. The downside would be that these places are much more expensive than a chain-style restaurant, at least where I live (Connecticut). You couldn’t get out of those places as a family of five for under a hundred dollars.
Learning To Cook
Many people find learning to cook intimidating – and cooking at home to be laborious and difficult. I’ve been cooking since I was small, helping my mom in the kitchen, and cooking in my own home for almost two decades now. I can now make pretty much anything at home that you could buy in a store, and the food my husband and I make at home tastes much better than almost anything we ever get at a restaurant.
I have a few favorite basic cookbooks, that helped me learn to cook. The Better Homes and Gardens cookbook, the Fannie Farmer cookbook, and the Fannie Farmer Baking Book pretty much cover all my basic cooking and baking needs. In fact I’m on my second Fannie Farmer book – my first one fell apart – and soon I’ll need a third as this one is falling apart too.
The great thing about these specific cookbooks is that they teach the basics. The Fannie Farmer book has recipes for pretty much any fruit or vegetable you might want to use. Everything from how to roast a chicken to how to bake a pie are at your fingertips. The great thing about these particular cookbooks is that they’re time-tested, and explain cooking basics in a way you don’t always find on recipe sites.
And of course, the internet can find any recipe for you in seconds flat. The one caution I always have is that internet recipes are hit or miss. Sometimes they’re great, but other times they just don’t work – or they’re written poorly. So I combine my basics cookbooks with internet recipes to get a perfect combination.
What does it take to learn to cook? Time, patience, and an experimental mindset. For example, I’ve made bread for years and year, and I’m still perfecting how to make the best loaf. But even with my first few loaves of bread years ago, it tasted darned good, didn’t take as much time as I thought it would, and saved money.
Amount Needed To Become A Millionaire
I started out this article by promising that learning to cook can make you a millionaire. Lets see how.
In order to be a millionaire by the age of 67, starting from zero, a 30 year old would need to save $12 per day and invest those savings at 8%. Interested in seeing what you’d need to save at different investment returns? Click here.
Think about that. Saving twelve dollars a day is enough to become a millionaire by a traditional retirement age. And eating at home rather than eating out all the time, and learning to cook your own foods rather than paying someone to “transform” it for you, are two great ways to lower your expenses and put more money back in your pocket.
Now, if you’re older than 30 you’ll need to save more than this. The same is true if you want to become a millionaire before 67, and, of course, if you already don’t eat out much, this tip won’t save you much money.
A Word On Prioritization
If you love eating out, hate to cook, or just really don’t want to – that’s perfectly fine. Maybe you love going out to eat, and find it to be great entertainment. Great! You can find other ways to free up the money you need to become a millionaire. As Paula Pant always says, you can afford anything, but you can’t afford everything. So if you’re spending more than you would like to on food, try “adding value” to it yourself instead.
I Want To Hear From You!
If you already like to cook, what’s your favorite thing to make? Or if you don’t really do a lot of cooking, what would you like to learn how to make? Let me know in the comments!
Interested in more of my food musings? Check out my four ingredient, no-knead artisan bread (you can keep it in the fridge for fresh bread all week), details on the cost of cookies, or my breakdown of the cost of homemade pizza vs. delivery (complete with recipe). Let’s not forget about my amazing homemade cakes. Or you can read about feeling ripped off at the restaurant, with a cost breakdown of a fancy at-home breakfast compared with eating it out.
Be sure to follow my blog for more great posts via e-mail or WordPress, or connect with me on Facebook or Twitter and say hello! You can also check out what I’m buying or baking on Instagram, what I’m pinning on Pinterest, or the latest books I’m reading (or want to read) over on Goodreads.