Over $1,000,000 on Coffee and Candy

"It's the latte factor."

- David Bach

Bach's "Latte Factor" aims to show how small, everyday expenditures, like a latte, can add up to significant amounts over time, hindering our ability to save and invest. He argues cutting out these small expenses can help us accumulate substantial wealth over time. The Latte Factor Book

"Beware of little expenses; a small leak will sink a great ship."

- Benjamin Franklin

I spent the last week tracking my impulsive purchases—things like a pack of gum, a (decaf) salted caramel crème cold brew from Starbucks, and fifteen ring pops for the last game of the 4th-grade girl's lacrosse team I coach. Some days I spent more, other days less, but my average daily spending over the past seven days was $9. To clarify, this amount didn't include my usual expenses like groceries, streaming services, bank fees, or gasoline; I only tracked spontaneous, non-essential items (though the 4th graders may beg to differ on the ring pops, and, oh, that cold brew felt essential).

Then I used a TVM (Time Value of Money) calculator* to see what $9 per day invested at a 7% annual return would grow to over 45 years (age 20-65).

$1,050,000

Over a million dollars on coffee and candy!

Track your own impulsive expenses for a week and see where you stand. Who knows, maybe you'll discover your hidden millionaire potential too!