'£124,688.23 Hospital Lunch From The Canteen?' - True opportunity cost of buying lunch at work

When it comes to personal finance, small daily habits can have a massive long-term impact. One such habit is bringing your own lunch to work instead of buying it.

It's so easy for us to forget how expensive buying lunch at work is! I often joke to my colleagues that I wouldn't even pay that same amount for what I get in a restaurant! I remember explaining this to one of my great mentors, a robotic prostatectomy consultant. He has a near-daily habit of buying a sandwich, a crisp packet and a drink as the magical £6 meal deal in the hospital canteen that we are all so aware of.

I told him, showing my frozen tupperware box meal I brought from home. 'I cook at night anyways for myself, my wife and both boys, we often batch cook. Why not just bring in the following day or even prepack and freeze for the coming weeks!'

My mentor looked at me and said the typical reply, 'That's quite an effort.'

I joked back, 'An effort that is more costly then £124,688.23?'

I don't just like anecdotal talk, I am a numbers person. I have to see it for myself. Let’s crunch the numbers and let me show you how saving just £30 per week and investing it at a 7% annual compound growth rate can grow into a significant sum over 30 years.

To me, the cost is not £6 per day, it's £1320 per year. It's an Opportunity Cost, saying no and losing out on potential investment earnings of £85,088.23!!

Step 1: Calculate how many weeks you work a year

Full-time NHS staffs' annual leave and bank holiday entitlements depend on the length of service:

- On appointment: 27 days annual leave + 8 bank holidays (35 days total or 7 weeks).

- After 5 years: 29 days annual leave + 8 bank holidays (37 days total or 7.4 weeks).

- After 10 years: 33 days annual leave + 8 bank holidays (41 days total or 8.2 weeks).

There are 52.14 weeks in a year. Subtracting the leave weeks:

- On appointment: Work ~45 weeks/year.

- After 5 years: Work ~44.7 weeks/year.

- After 10 years: Work ~43.9 weeks/year.

For this example, I will use 44 work weeks per year after deducting annual leave etc as a broad generalised example representing most people working in the NHS.

The Math of Saving and Investing £30 a Week

Here’s the breakdown of our approximations & assumptions:

- Average weekly savings bringing your own lunch into work = £30

- Long term annual compound growth rate of broad market over last 100ish years = 7% (compounded annually)

- Investment period = 30 years (most people's minimum working career)

- Total work weeks in a year = 44

Step 2: Total Cash Contributions Over 30 Years

If you save £30 every week for 30 years, your total contributions would be:

£30 per work week x 44 work weeks = £1320 per year

Over 30-Year Career

£30 per work week x 44 work weeks x 30 years = £39,600

This is the amount you’ve saved IN CASH over a 30-year career if you brought in your own lunch without considering any investment growth.

Step 3: Compound Growth Formula - what if you put it in a broad market index fund

First, calculate the total annual contribution:

£30 per week x 44 work weeks per year = £1320 per year

Now, we need to calculate the future value of the lunch money invested with the following details:

• Annual Payment (P): £1320

• Annual Compound Growth Rate (r): 7% or 0.07

• Number of Periods (n): 30 years

Plug all the numbers into a compound growth calculator and the estimated final amount is approximately £124,688.23.

A whopping £124,688.23 in investment assets from lunch money!!

Please note this calculation makes a few assumptions:

• The £1320 annual contribution is effectively added at the end of each year for the purpose of calculation (this is standard for the ordinary annuity formula).

• With Dollar Cost Averaging, sometimes you would buy more under-valued stocks, sometimes you would buy less over-valued stocks.

• The 7% annual growth is consistent over the entire 30 years. Based on historical stock market data spanning over 100-odd years, it's actually pretty conservative, many investment advisors out there quote 8-10%.

• This figure does not account for taxes or fees, which would impact the actual final amount.

Step 4: Growth Breakdown

Out of the total future value of £124.688.23:

- Your contributions are only £39,600 - cash lunch money over 30-year career.

- The remaining £85,088.23 comes purely from compound interest growth invested in the broad stock market! You didn't have to work for that! How many years salary does that equate to you buying back years you didn't have to work for~

This demonstrates the power of consistent investing and compound growth over long periods of time.

Blind to the leak caused by frequent minor spending

The problem that many people have is that we struggle to look beyond the near future. We struggle to look far out in the distance of time. It's SO easy to see how £6 for your lunch seems acceptable. Yes, you might think it's over-priced, but the amount is not big enough to think you can't afford it.

Near term costs are much easier to see and understand than long term hidden potential opportunity costs, the lost of potential future earnings that you don't see.

But what if I tell you that you pay approximately £1,320 per year for that lunch that you probably wouldn't really choose or like if you weren't at work. You could have brought in food which you had to prepare and cook the night before anyway!

Often Forgotten Economies of Scale with Home Cooking

Many NHS workers come from smaller living or family units, it's often cheaper and easier to buy larger quantities of raw ingredients! Chicken thighs comes in boxes of 4 or 8, not 2 or 3. Sausages comes in packages of 8 not 2 or 3. Potatoes comes in sacks!

That small extra you prepare, which you were cooking anyway, I would argue, costs you less than spending £6 something every day in the hospital canteen.  Even if you make your own sandwiches and create your own meal deal, it would come to less than £6 per lunch!

What Does This Mean for You?

By simply bringing leftovers or lunch to work instead of spending £30 per week in hospital canteen, you could accumulate over £124.688.23 in 30 years. That’s money you can use for:

• Early retirement or go part time

• Clearing your mortgage or debt

• A dream vacation

• Financial security - the Sleep-Well fund

• Financial backing for your children (education, home down payment, marriage etc)

The Takeaway: Small Habits Lead to Big Results

A forest was a collection of small plants once upon a time. A tall huge tree was a small seedling decades ago. It would never have existed if the seedling never started.

It’s easy to dismiss small savings as insignificant, but when paired with smart investing and time, they will snowball into life-changing sums. So next time you’re tempted to buy lunch out, remember this: your leftovers today could be your financial freedom tomorrow.

Start small. Stay consistent. Watch your wealth grow! 🌱

At Medical Finance Academy, I provide 1-to-1 in-person tailored coaching service to educate you on everyday financial literacy, introducing you to the world of asset allocation and generational wealth.

I am Simon Wong, a Urology registrar & money enthusiast working in the NHS.

As an investor and money enthusiast for over 15 years, and a proud father of 2 teenage boys, I have made all the money mistakes one needs to experience in a lifetime. The subsequent corrections after intense studying and reading has completely altered me and my family's path to financial independence.

I wish someone could have sat me down and taught me all this 20 years ago! Now I have compacted all my knowledge & experience into a Simple Framework that could be easily adapted by anyone working in the NHS. 

This is the Path of Least Resistance to fast-track you through your financial journey!

Regain your own control of your financial freedom, and ultimately TIME!

I will empower you to build a Self-managed Low cost, Low risk and Low stress Investment asset portfolio, accumulating assets through time, making money work for you, whilst you continue to provide your service & skills in the NHS.

Topics covered in the Medical Finance Academy coaching:

• Educating you on the financial system in the UK

• Understanding the financial requirement to reach financial independence/retirement/financial freedom

• The importance of, and how to get to your 'F*** You Money'

• Debunk any common misconceptions of money management and investing

• Highlight many Unspoken Issues with Our NHS Pay and money challenges that everyone will face with a career in the NHS

• Teaching the Variety of Investment Assets available for everyday tax-paying working people in UK, and why some assets may be more suitable for wealth building over others.

• Learn the difference in Good vs Bad debt

• Strategies in debt management

• Optimising credit management to Improve Credit Score

• Setting up the All-important Emergency Fund

• Setting up Zero-based budgeting, putting every penny to work

• Understanding and getting comfortable with the stock market

• Education in Fundamentals of Stock Market Investing

• How to choose between different savings/investment accounts

• Improving Tax efficiency whilst optimising returns in the UK banking system

• Understanding and Maximising your NHS Pension

• Decipher Psychology of Money with establishing good money discipline and habits.

• Importance of Avoiding Lifestyle Inflation and the mathematics behind it, not letting your new money journey justify your high spending

• Create a Self-managed All-weather asset portfolio with the lowest-possible risk, lowest-possible cost/fees and lowest possible emotional stress to build generational wealth through time to achieve Ultimate Financial Independence