“The Latte Factor” an idea first expressed by David Bach in his book Automatic Millionaire talked about a systematic savings plan based on Designer Coffee Purchases.
American spend literally millions of dollars per year on expensive coffee drinks and the like at designer coffee houses around the country. For some it’s an everyday ritual, for others it’s just a couple times a week.
There are coffee Houses on just about every corner and certainly at every off ramp in the country….It’s in our face everywhere…..and with such an enjoyable habit it is certainly hard to resist!
As a financial counselor, it just amazes people when I use what would be considered a “minor” habit as a method of saving and accumulating money…..ie:
Venti Mocha Average Price = $5.10
Times Three Per Week = $15.30
Times 4.33 Avg. Weeks Per Month = $66.25
Times 5% Earnings Over 10 Years = $10,468.00 !!
Times 5% Earnings Over 20 Years = $27,560.00 !!
$2.50 per day on just plain Coffee would be $11,973.00 in 10 Years and $31,524.00 in 20 Years!! I have sat with folks who actually buy two $5.00 Latte’s per day…..Robbing their savings or Insurance Plans of a whopping $126,090.00 over 20 Years if they maintain that habit!!
Remember we are talking about “coffee”, a single habit out of what may be just one of multiple rituals in some people’s lives. Habits such as your daily Coffee keep many from achieving true finance success or simply blur the horizon in such a way that we may never reach our true pinnacle
