Can Learning to Cook Make you a Million Dollars?

One of the best frugal things you can do is learn to cook. But can learning and using this skill make you a millionaire?

Let's compare two people. We'll call them Jim and Bob.

Jim and Bob are the same: Same income, same expenses, same house, and same family size. There is just one difference:

Bob does not know how to cook. Jim does.

For the sake of argument, let's say that each one slaps together their own breakfast and lunch the same way, too. They only differ at dinner time.

(Note: Economists call this ceteris paribus- "all else being equal" - so they can isolate one thing in order to study its effects. We are studying the difference between take out dinners and cooking dinners, so we are going to pretend that Bob and Jim are identical in every other way. Ceteris paribus.) 

Jim cooks his dinner at an average cost of $3 per meal. He achieves this by meal prepping, eating his leftovers, and choosing whole, fresh foods over marked-up packaged items.

Bob orders $12 of takeout every night. Or, maybe he eats cereal at home for two nights in a certain week, but orders a $36 restaurant meal with cocktails the next. Either way, Bob's average dinner cost is $12/night.

Since Bob and Jim have the same income and non-dinner expenses, this means Jim has an extra $360 each month to invest.

Let's say Jim invests this in a broad US Stock Index Fund, within a tax-deferred retirement account, that earns him 8% each year and compounds annually. If you don't know what this means, don't worry too much- this is not an article about index funds. Just keep in mind the 8%.

We know that compound interest acts like an amplifier, both for your debt and for your savings. We also know that the longer it happens, the bigger those effects are.

Over 40 years, from the day Jim got his first job out of college at age 22, to the day he retires at age 62, Jim saves up $1,119,124.

One Million, One Hundred Nineteen Thousand, One Hundred Twenty Four Dollars.

Bob, of course, has none of this: he has been steadily eating both the money he could have been investing and the returns that invested money could have made.

(Note: I chose 8% for this example as a compromise. The stock market saw 11% average total, non-inflation-adjusted returns between 1950-2009. Adjust for inflation and you get 7.2%. Obviously 2009 was a bit of a rough year to leave off on. Feel free to run this example on a compound interest calculator using whatever interest rate you feel comfortable with.)

Remember Avocado Toast Guy, and how he pissed off a lot of people? I don't think he was anti-avocado. I think he was anti-restaurant. It's too bad he came off sounding like an entitled doucheplank.

For the record, I'm not anti-restaurant. I love going to restaurants. It's one of my favorite things to do. But it's always a treat, never a convenience fix.

So how do I learn to cook?

We live in the age of YouTube! YouTube not only taught me how to make my own delicious caramel sauce, but it can teach you basic stuff like how to boil rice and peel potatoes, too.

Cooking used to be a skill that was taught in schools, but due to budget cuts and a changing culture, it no longer is.

My tinfoil-hat conspiracy-theory alter-ego says that the big food corporations, especially fast food restaurants, are just fine with a population that does not know how to cook from scratch. If no one knows how to cook, they're completely dependent on the dollar menu.

Is it a big conspiracy?

Probably not, but they're not crying about it either. They are totally happy to sell you the same food at a huge markup.

I don't have a well stocked kitchen.

It's another myth that you need a zillion kitchen gadgets and the skills of some master chef to make food at home.

In fact, you don't even need a fridge or a microwave. Here are seven healthy meals you can cook without a fridge.

I don't have time to cook.

Meal Prep Sunday may be for you.

You know how when a pregnant lady gives birth, her friends all come over with freezer meals so she doesn't have to cook for a while?

Why not do that for yourself?

The idea is this: on Sunday, make a large portion of a dish, then pop it into freezer containers. Every day you come home and don't feel like cooking, instead of blowing $10-12 + tip on takeout,  just re-heat a freezer pack.

Check out the mealprepsunday reddit for some inspiration and recipes.

How do you even eat on $3/meal?

Mr Money Mustache does it on $1.33/meal. I'm not that hardcore.

Many of my Meal Prep Sunday meals cost me around $2-3 /meal, unless I am making something incredibly fancy.

Things I've made so far under $3/meal:

Baked Ziti with 2 Cheeses and Vodka Sauce ($2.85/meal)
Curry Laksa with Eggplant and Bok Choy over Rice ($2.10/meal)
French Toast with Eggs and Bacon ($2.50/meal)

Don't you like to eat out?

The truth is, I still eat out a lot. I live in a city full of wonderful ethnic food carts and world class restaurants. My favorite way to spend a day off is wandering through Flushing, Queens with a bubble tea in one hand and a custard bun in the other.

Being at a restaurant with friends is a joy in my life, and I like to try new things. But I never eat out for convenience, or just because I am too tired to cook. That's what the freezer meals are for.

I used to eat my lunches out at work all the time. What a huge waste! If I'm going to spend that kind of money, I should at least do it when I have time to savor every bite, and my mind isn't clouded with expense reports and power of attorney forms. That's where meal prep Sunday came in.

I still like eating out a lot, but every time I do it, it's a celebration, and that makes it more special.

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