Author Topic: Your Latte isn't why you're in Debt, and the people who say it is are lying  (Read 14776 times)


MgoSam

  • Magnum Stache
  • ******
  • Posts: 3643
  • Location: Minnesota
I hate this, it isn't simply about the latte imo, it's the fact that people buy so many unnecessary crap that they think don't matter because it's only $3, that they fail to realize how much the crap collectively costs. In addition, by buying unhealthy things, they feel like they need to spend more money on "healthy" things such as a boot camp class or massages...things that while can be very beneficial, are somewhat unnecessary if one lives a healthy lifestyle.

Warlord1986

  • Handlebar Stache
  • *****
  • Posts: 1174
  • Age: 33
What the author fails to understand (or more likely, simply ignores) is that it's not just about the lattes. Getting lunch with my friend this week won't send me over the edge into a tailspin of crazy debt that eats away at my life until there is nothing left but mindless consumerism. But regular lattes, lunches out, cable, shopping trips, and other junk will. It's easier to summarize all of that as 'lattes' rather than listing it out.

AlwaysLearningToSave

  • Bristles
  • ***
  • Posts: 437
It's easier to summarize all of that as 'lattes' rather than listing it out.

Bingo.  The latte is not itself the problem.  It is a metaphor for and a microcosm of the problem.

gardeningandgreen

  • Bristles
  • ***
  • Posts: 326
  • Location: Minnesota
    • Gardening and Green
This legitimately makes me angry. I can see from my family and friends the "latte" factor is what is eating away at their lives. They never have money but always seem to afford the meal out or the new gadget...

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1453
This legitimately makes me angry.

I think you need to take a deep breath and let life move on...

forummm

  • Walrus Stache
  • *******
  • Posts: 7357
  • Senior Mustachian
It's a clickbait title. Whatevs.


LiveLean

  • Pencil Stache
  • ****
  • Posts: 724
  • Location: Central Florida
    • ToLiveLean
Agreed. It's latte as metaphor.

What I dislike about stories like this is the assumption that most everyone drinks coffee. A generation ago, coffee drinkers were mostly seniors. Hence coffee was marketed with seniors in commercials for Folgers, Maxwell House, Tasters Choice. I can't recall anyone drinking coffee during my college years (1987-1991). Jolt Cola, yes. But coffee, no.

My parents instilled in me wonderful mustachian habits. My dad also guaranteed that I'd never sip coffee in my life. That's because he'd get up at 5:30 a.m. and start chain-smoking and pounding coffee. My first breath every morning was cigarettes and coffee, guaranteeing that I'd never touch either. I'm repulsed by the smell of both.

So I've saved a ton of money by not drinking coffee. And Dad quit smoking when I was 18 and is still with us at 77.

dandarc

  • Magnum Stache
  • ******
  • Posts: 3309
  • Age: 36

Chris22

  • Magnum Stache
  • ******
  • Posts: 3210
  • Location: Chicago NW Suburbs
As a non-coffee-drinking, non-hardcore Mustachian, I see the humor from both sides.  On one hand, it IS ridiculous to spend $3-5/day on something frivolous and then complain about no money, but on the other, there are certain things, like Starbucks and iPhones, that are triggers for MMM devotees to go off on as if their presence signaled an exploding volcano of waste in every aspect of the holders' lives and they're surely on the edge of the debt volcano as a result of the coffee and iPhone habit. 

hdatontodo

  • Bristles
  • ***
  • Posts: 280
  • Location: Balto Co, MD
I don't drink coffee, but I think the big ticket items (cars, houses, etc) have a greater impact on my having extra money to save. Not having a $350 car payment or $2,000 house payment would enable someone to buy coffee and still save money.

beltim

  • Magnum Stache
  • ******
  • Posts: 2822
What I dislike about stories like this is the assumption that most everyone drinks coffee.

It's not an assumption.  83% of adult Americans drink coffee: http://www.usatoday.com/story/money/business/2013/04/09/coffee-mania/2069335/

slugline

  • Handlebar Stache
  • *****
  • Posts: 1159
  • Location: Houston, TX USA
What I dislike about stories like this is the assumption that most everyone drinks coffee. A generation ago, coffee drinkers were mostly seniors. Hence coffee was marketed with seniors in commercials for Folgers, Maxwell House, Tasters Choice. I can't recall anyone drinking coffee during my college years (1987-1991). Jolt Cola, yes. But coffee, no.

My college years immediately followed yours and I guess we must have just caught the upscale coffee wave breaking. There was a coffee shop retailing a wide variety of beans just off-campus and an on-campus cafe got started in a lounge area. But I think I remember that the most common go-to caffeinated beverage among my peers seemed to be Mountain Dew. (What were we thinking?)

Spork

  • Walrus Stache
  • *******
  • Posts: 5753
    • Spork In The Eye
What I dislike about stories like this is the assumption that most everyone drinks coffee. A generation ago, coffee drinkers were mostly seniors. Hence coffee was marketed with seniors in commercials for Folgers, Maxwell House, Tasters Choice. I can't recall anyone drinking coffee during my college years (1987-1991). Jolt Cola, yes. But coffee, no.

My college years immediately followed yours and I guess we must have just caught the upscale coffee wave breaking. There was a coffee shop retailing a wide variety of beans just off-campus and an on-campus cafe got started in a lounge area. But I think I remember that the most common go-to caffeinated beverage among my peers seemed to be Mountain Dew. (What were we thinking?)

My college years were before LiveLean's... and myself and everyone I knew drank coffee.  It wasn't "hang out at the Starbucks and spend $5 a cup".  It was probably Folgers from the college cafeteria.

Back to the article:  The end of the world will come from people's failure to generalize.  No, it's not necessarily coffee.  But if you're plopping $5 a day on something that seems insignificant, the amount over time will be significant.

BlueMR2

  • Handlebar Stache
  • *****
  • Posts: 2000
Had this discussion on the book of faces recently.  A friend posted up something about how poor people should go ahead and spend $20 a week on coffee because it won't add up to anything anyways.  I had to disagree.  $1040 a year is a very nice emergency fund.  Additional $1000/yr beyond that in a Vanguard fund will most certainly make a difference!

talltexan

  • Handlebar Stache
  • *****
  • Posts: 2302
I think the approach for cutting is actually sort of straight-forward. what do you want your savings rate to be? let's say you want 25% (I know, I know, half-ass rather than bad-ass). So start looking at your expenses, largest first, and ask yourself what would be necessary to achieve a savings of 25% without decreasing your psychology. Bonus points if you can double that number in some categories (because other categories are, ahem, "fixed").

So if you're spending $80/month on coffee, figure out how to achieve $40/month. Perhaps you can accomplish that 100% through buying gift cards on groupon...

MoneyCat

  • Handlebar Stache
  • *****
  • Posts: 1754
  • Location: New Jersey
I drink coffee, but I don't purchase coffee by the cup at Starbucks or Dunkin Donuts or McDonalds or any of the other places that will make it for you. That's because I can buy 3 lbs of pre-ground coffee beans at the warehouse store for $9 and get 250 cups out of what would only get my 3-4 cups of coffee at Starbucks. It is really just as good plus I don't have to go anywhere to get it and I can drink it in my pajamas. People waste money on the stupidest things and the media is largely against telling people the truth about this stuff, because then people would stop buying worthless overpriced crap all the time. Our economy is largely based on making people feel inadequate and insecure and then telling them that everything will be better if they buy this or that. It's bullshit.

Kitsune

  • Handlebar Stache
  • *****
  • Posts: 1680
I think the approach for cutting is actually sort of straight-forward. what do you want your savings rate to be? let's say you want 25% (I know, I know, half-ass rather than bad-ass). So start looking at your expenses, largest first, and ask yourself what would be necessary to achieve a savings of 25% without decreasing your psychology. Bonus points if you can double that number in some categories (because other categories are, ahem, "fixed").

So if you're spending $80/month on coffee, figure out how to achieve $40/month. Perhaps you can accomplish that 100% through buying gift cards on groupon...

Or, for everything, figure out if you're getting enough happiness/satisfaction out of it to justify the expense. Lattes, for example: 5$ for a latte and 2-hour conversation with a friend, once or twice a month? Absolutely, bring it on. Latte every morning? Enh, routine. Cut mercilessly. I watch minor TV. Cut cable, keep netflix. I value being put-together: slightly higher clothing budget than I'd like. I love good food: I learned to cook really well and have an excellent cookbook collection and decent grocery budget, but no restaurant bills.

Like, if your morning latte genuinely brings you joy, then keep it! But cut something else! And not EVERYTHING can bring you joy; it's a choice you have to make! You can have a lot of things, but you can't have everything, and, statistically, you enjoy things less when they're routine... so cut the routine and have really pleasant splurges every so often. You'll be happier AND richer.

Digital Dogma

  • Bristles
  • ***
  • Posts: 423
I used to drink about a pot of coffee per day, and would suffer heartburn because of it. I've since switched to earl gray tea which has the added benefit of being brewed at work using the hot water spout on our water cooler at work. Its cut down on cleaning since I no longer have a thermos to clean milk/coffee out of every day, and I get 2-3X the caffeine from a single drink so I consume less volume of liquid (fewer bathroom breaks!).

I toss a dozen individually wrapped tea bags (due to the work environment, they have to be 100% sealed) in my lunch bag and use them all week long.

Coffee is more of an afternoon thing now, if at all.

I used to be a super-sucka getting coffee for $2.25 a cup at the cafeteria at work for lunch, ontop of a 6-7$ lunch. I spent as much on lunch for one day back then as I do for a weeks worth of lunches now.
« Last Edit: June 08, 2016, 02:40:41 PM by Digital Dogma »

pachnik

  • Handlebar Stache
  • *****
  • Posts: 1756
  • Age: 54
  • Location: Vancouver, BC
Or, for everything, figure out if you're getting enough happiness/satisfaction out of it to justify the expense. Lattes, for example: 5$ for a latte and 2-hour conversation with a friend, once or twice a month? Absolutely, bring it on. Latte every morning? Enh, routine. Cut mercilessly. I watch minor TV. Cut cable, keep netflix. I value being put-together: slightly higher clothing budget than I'd like. I love good food: I learned to cook really well and have an excellent cookbook collection and decent grocery budget, but no restaurant bills.

Like, if your morning latte genuinely brings you joy, then keep it! But cut something else! And not EVERYTHING can bring you joy; it's a choice you have to make! You can have a lot of things, but you can't have everything, and, statistically, you enjoy things less when they're routine... so cut the routine and have really pleasant splurges every so often. You'll be happier AND richer.

I like this.  Once in a while, a coffee shop visit is a treat and not routine.   

One way that I've found to not want to visit a coffee shop on my way to work, is to make a coffee at the office for myself and then take it outside onto the entry steps.  It is a pleasant, clean place on a treed avenue.  I am also the first one in in the mornings, so it is quiet.  For me the daily coffee shop visit wasn't about the coffee, it was about a pleasant place that was not my office where I sipped a cup of coffee and maybe looked at a newspaper.

slowsynapse

  • Stubble
  • **
  • Posts: 101
  • Age: 47
I thought the article was interesting and agree with most that the latte is really a metaphor.  When the article discussed the high fixed costs like housing in the last paragraph or two, they make it sound like people have to have expensive homes and that is what people do in this day and age.  I have lived in super nice and much less nice houses and am completely happy in a modest home.  It is still better than almost everyone in human history has lived in.

Also, let's say I had a daily latte habit of $3 per day 5 days a week or $780 per year.  I would have to fund my retirement with $19,500 to pay for this behavior.  While it doesn't create debt, it would be 4 or 5 months of extra time in the workforce that I definitely don't want to spend.


FINate

  • Handlebar Stache
  • *****
  • Posts: 1300
Or, for everything, figure out if you're getting enough happiness/satisfaction out of it to justify the expense. Lattes, for example: 5$ for a latte and 2-hour conversation with a friend, once or twice a month? Absolutely, bring it on. Latte every morning? Enh, routine. Cut mercilessly. I watch minor TV. Cut cable, keep netflix. I value being put-together: slightly higher clothing budget than I'd like. I love good food: I learned to cook really well and have an excellent cookbook collection and decent grocery budget, but no restaurant bills.

Like, if your morning latte genuinely brings you joy, then keep it! But cut something else! And not EVERYTHING can bring you joy; it's a choice you have to make! You can have a lot of things, but you can't have everything, and, statistically, you enjoy things less when they're routine... so cut the routine and have really pleasant splurges every so often. You'll be happier AND richer.

I like this.  Once in a while, a coffee shop visit is a treat and not routine.   

One way that I've found to not want to visit a coffee shop on my way to work, is to make a coffee at the office for myself and then take it outside onto the entry steps.  It is a pleasant, clean place on a treed avenue.  I am also the first one in in the mornings, so it is quiet.  For me the daily coffee shop visit wasn't about the coffee, it was about a pleasant place that was not my office where I sipped a cup of coffee and maybe looked at a newspaper.

I agree IFF you are not carrying credit card or other high interest debt, and you are still able to save a substantial amount each month. If you're paying +18% to finance a debt then you should treat this as the bona fide financial emergency it is, and you have no business buying $3 lattes. Instead, brew a pot of coffee or tea at home and have a friend over for conversation. Otherwise the problem is that it's too easy to justify lots of different types of "infrequent" luxuries (latte, eating out, manicure, movie, drinks) by telling yourself it's only once or twice a month, yet all together it adds up to a significant amount.   

zephyr911

  • Magnum Stache
  • ******
  • Posts: 3628
  • Age: 40
  • Location: Northern Alabama
  • I'm just happy to be here. \m/ ^_^ \m/
    • Pinhook Development LLC
I don't drink coffee, but I think the big ticket items (cars, houses, etc) have a greater impact on my having extra money to save. Not having a $350 car payment or $2,000 house payment would enable someone to buy coffee and still save money.

Pretty much said ten other ways above, but yeah, the latte is a red herring. It is one example of how EVEN small choices can add up to major differences in outcomes.

Not ONLY small choices. EVEN small choices.

Bigger choices can add up to EVEN BIGGER differences in outcomes. The whole point is to get people to realize how much power they have over those outcomes, not to put all the coffee shops out of business while ignoring all the other exploding waste volcanoes in our lives. /rant
« Last Edit: June 10, 2016, 11:02:34 AM by zephyr911 »

Logic_Lady

  • 5 O'Clock Shadow
  • *
  • Posts: 52
What I dislike about stories like this is the assumption that most everyone drinks coffee.

It's not an assumption.  83% of adult Americans drink coffee: http://www.usatoday.com/story/money/business/2013/04/09/coffee-mania/2069335/

And even those who don't drink coffee might drink tea or some other beverage which is similarly marked up at coffee shops.

Matilda

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Or, for everything, figure out if you're getting enough happiness/satisfaction out of it to justify the expense. Lattes, for example: 5$ for a latte and 2-hour conversation with a friend, once or twice a month? Absolutely, bring it on. Latte every morning? Enh, routine. Cut mercilessly. I watch minor TV. Cut cable, keep netflix. I value being put-together: slightly higher clothing budget than I'd like. I love good food: I learned to cook really well and have an excellent cookbook collection and decent grocery budget, but no restaurant bills.

Like, if your morning latte genuinely brings you joy, then keep it! But cut something else! And not EVERYTHING can bring you joy; it's a choice you have to make! You can have a lot of things, but you can't have everything, and, statistically, you enjoy things less when they're routine... so cut the routine and have really pleasant splurges every so often. You'll be happier AND richer.

I like this.  Once in a while, a coffee shop visit is a treat and not routine.   

One way that I've found to not want to visit a coffee shop on my way to work, is to make a coffee at the office for myself and then take it outside onto the entry steps.  It is a pleasant, clean place on a treed avenue.  I am also the first one in in the mornings, so it is quiet.  For me the daily coffee shop visit wasn't about the coffee, it was about a pleasant place that was not my office where I sipped a cup of coffee and maybe looked at a newspaper.

I like both of these.  I have/had a *serious* coffee addiction, most especially a very-anti-mustachian coffee-shop-coffee addiction.  One thing I did, to increase the "special-ness" or joy in my coffee-shop mocha was to save them for social meetings.  No more grabbing one to take with me while I run errands or on my way in to work; only if I have a coffee date with a friend.  As a working parent, my genuinely social times are rare and precious to me, made even better now with the treat of a good drink. 

It's not a perfect system and I don't stick with it all the time, but I try to and it does help by taking the routine-ness out of it.

MgoSam

  • Magnum Stache
  • ******
  • Posts: 3643
  • Location: Minnesota
I'm probably fortunate in that I don't enjoy the taste of coffee. I do love tea, but it's rare that I find myself willing to try the tea at Starbucks and other places because so often it isn't all that good.

Chris22

  • Magnum Stache
  • ******
  • Posts: 3210
  • Location: Chicago NW Suburbs
I went to Starbucks twice yesterday.  But it was to meet with our prospective tenants in our rental property (they went to the wrong location the first time out, and we had to go over and meet them at a different one).  Only purchase made was a $2.49 muffin to occupy our daughter so the adults could do business :)

jinga nation

  • Handlebar Stache
  • *****
  • Posts: 1096
  • Location: 'Murica's Johnson
  • Left, Right, Peddlin' Shite
I'm probably fortunate in that I don't enjoy the taste of coffee. I do love tea, but it's rare that I find myself willing to try the tea at Starbucks and other places because so often it isn't all that good.
Maybe it is because you grew up having home-brewed Chai with milk and cardamom and other tea spices.
Tazo Chai comes nowhere near to what my wife makes, she uses fresh ginger, or lemon grass. I love making milky tea with Chai Masala (made by an in-law). 
My coffee preference is Kenya/Tanzania/Ethiopia/Rwanda beans, grind them myself. This is because I grew up on Kenyan coffee(and tea). I find South American coffee generally harsh.

Meanwhile, govt civilian co-worker is divorced, paying alimony and child support, traded in his large sedan lease for a bare bones small sedan lease (he had a another large sedan lease before that, changing cars every 18-24 months). Withdrew from his 401(K) last year because the stock market wasn't doing well and got hit with a penalty (he asked my why he was penalized, couldn't be bothered to check IRS rules BEFORE withdrawing). Always munching on junk food and frozen meals. Daily huge coffee bought on the way in, then K-cups 2-3 times a day. He's a gambling guy (poker at the dog track). Plus is retired military with that income. Yet constantly in a cash crunch.

My boss told him to cut down on the expenses and cook at home, etc. He's like, it's just a few bucks here and there. Daily, you fool! Do that for 200 days. Oy vey!

MgoSam

  • Magnum Stache
  • ******
  • Posts: 3643
  • Location: Minnesota
I'm probably fortunate in that I don't enjoy the taste of coffee. I do love tea, but it's rare that I find myself willing to try the tea at Starbucks and other places because so often it isn't all that good.
Maybe it is because you grew up having home-brewed Chai with milk and cardamom and other tea spices.
Tazo Chai comes nowhere near to what my wife makes, she uses fresh ginger, or lemon grass. I love making milky tea with Chai Masala (made by an in-law). 


Perhaps, but I don't really enjoy chai. I did enjoy coffee a little during my sophomore year of high school, I got in the habit of going to bed at like 830 so I could wake up at 4 to study for the APUSH (AP US History) test, and would drink about a 4 cups of black coffee while studying. It really helped and I ended up getting a 5 on it (highest score), but after that I stopped.

Kaspian

  • Handlebar Stache
  • *****
  • Posts: 1536
  • Location: Canada
    • My Necronomicon of Badassity
It's easier to summarize all of that as 'lattes' rather than listing it out.

Bingo.  The latte is not itself the problem.  It is a metaphor for and a microcosm of the problem.

People (and writers like that)  intentionally misunderstand and intentionally misrepresent the latte factor in order to play Devil's advocate.  Affluent people really aren't that stupid--they know full well it's about nickel-and-diming.  It's like a courtroom lawyer who theatrically pretends he can't understand a very obvious point--an advanced form of trolling and bullshittery which I cannot stand. 

talltexan

  • Handlebar Stache
  • *****
  • Posts: 2302
I had a professor with a side gig that was helping people succeed on the GRE. He said if you give him $100 and 30 minutes, he'll raise your score 50 points. I think giving people caffeine was most of what he did.

Owns a HUGE house on North Schore of Chicago, so he must be successful at it.

SoccerLounge

  • Stubble
  • **
  • Posts: 240
Hi all, new to the forum. I have mainly joined so that I can vent about articles like this to a sympathetic audience. ;)

One of the things that irritates me about this kind of article is the level of false dichotomy that's thrown around. We're going to do a study on multimillionaires! Then we're going to mention one done on people who are bankrupt!

Except, for most of the folks at whom "cut back on lattes"-type financial advice is targeted,  the problem isn't that they're going to go bankrupt, it's that they aren't saving enough for retirement because they spend a disproportionate amount on 'small luxuries'!! The world of money isn't divided into 'billionares and people on unemployment insurance' or 'people who can achieve FIRE and people in bankruptcy'. The vast majority of the middle class, and even much of the grouping of lower earners, falls into the 'getting by but not really saving, because look! new TV!' category.

But guess what? Changing habits is haaaaard. So let's pretend that it's all The System's fault, rather than just some of it being the system's fault and the rest being down to the individual.

TheGrimSqueaker

  • Handlebar Stache
  • *****
  • Posts: 2105
  • Location: A desert wasteland, where none but the weird survive
  • www.theliveinlandlord.com
    • The Live-In Landlord

But guess what? Changing habits is haaaaard. So let's pretend that it's all The System's fault, rather than just some of it being the system's fault and the rest being down to the individual.

Changing habits is difficult, and generally requires that you put something else in place of whatever it is you're giving up. One of the legitimate criticisms of the Mustachian approach is that we often focus on the things we withhold from ourselves more than we emphasize the things we do to fill whatever void (real or perceived) created by the things we deliberately go without. In reality most of us have productive, positive habits like packing our lunches when we go to work instead of dining out. An article filled with productive habits to acquire (that coincidentally crowd out spendypants habits) would probably go a lot farther than the give-up-your-latte approach, in terms of accomplishing actual change.

TheStachery

  • Guest
Our economy is largely based on making people feel inadequate and insecure and then telling them that everything will be better if they buy this or that. It's bullshit.
This.

Cpa Cat

  • Handlebar Stache
  • *****
  • Posts: 1564
I have clients who spend $20 or more on food and beverages, five days a week. Then they splurge on the weekends with their families.

These people aren't going bankrupt because of their $20/day. But they are working well beyond normal retirement age. When they have an emergency, it's stressful, because they have spent all of their money.

Will $20/day turn into 1 Million Dollars? I don't know. I lost my crystal ball. But my calculator tells me it'll turn into $5,000 a year. How many people would feel better about their financial situation if they had $5,000 in the bank instead of $0? Every year, I have clients who are in the 20-25% tax brackets who would save $1,000+ on their taxes if they put $5,000 into an IRA. But they can't make that contribution because they don't have $5,000.

When people say the little things don't matter, they are being foolish. The little things do matter.

SoccerLounge

  • Stubble
  • **
  • Posts: 240
(Sensible things)
You are rather nicer than I am, I think. :) But I definitely agree about highlighting the positives. That's even more important because the average spender/consumer might not even believe that there are positives to how we live.

zephyr911

  • Magnum Stache
  • ******
  • Posts: 3628
  • Age: 40
  • Location: Northern Alabama
  • I'm just happy to be here. \m/ ^_^ \m/
    • Pinhook Development LLC
I have clients who spend $20 or more on food and beverages, five days a week. Then they splurge on the weekends with their families.

These people aren't going bankrupt because of their $20/day. But they are working well beyond normal retirement age. When they have an emergency, it's stressful, because they have spent all of their money.

Will $20/day turn into 1 Million Dollars? I don't know. I lost my crystal ball. But my calculator tells me it'll turn into $5,000 a year. How many people would feel better about their financial situation if they had $5,000 in the bank instead of $0? Every year, I have clients who are in the 20-25% tax brackets who would save $1,000+ on their taxes if they put $5,000 into an IRA. But they can't make that contribution because they don't have $5,000.

When people say the little things don't matter, they are being foolish. The little things do matter.
Even without the weekend splurge, $20 daily is over $7k annually.
$20/day plus, let's say $100 a weekend (just two people eating at a marginally nice restaurant twice), is roughly a grand a month. At 7% real return, you have $175K in a decade, and a million in 27-28 years.

DutchV

  • 5 O'Clock Shadow
  • *
  • Posts: 5
Ten years ago I worked with a guy who simply had no clue.  He lived with his grandmother so he had no rent, made around $55,000 / year, but never had a nickel to his name.  We were paid biweekly, so of course he hated the longer months, since they had extra days after payday.  Where did it go?  Not lattes exactly, but carryout lunches, fountain sodas and the daily purchase of lottery scratch-off tickets.  He called the scratch-offs his retirement plan. 

Zikoris

  • Magnum Stache
  • ******
  • Posts: 3331
  • Age: 32
  • Location: Vancouver, BC
  • Vancouverstachian
Not much to add, but over the years I've been able to point out to MANY coworkers that they spend as much on coffee and lunches as I do traveling all over the world, if not more.

Spork

  • Walrus Stache
  • *******
  • Posts: 5753
    • Spork In The Eye
Not much to add, but over the years I've been able to point out to MANY coworkers that they spend as much on coffee and lunches as I do traveling all over the world, if not more.

Maybe that's actually a better yardstick.  You tell someone their coffee costs them $18k over 10 years and they just hear Charlie Brown's teacher.  (Wah wah wah wah wa.) 

Maybe money/compound interest is too abstract a concept for some... and using concrete comparisons of "world travel" vs Starbucks is a better method.

tyort1

  • Handlebar Stache
  • *****
  • Posts: 2228
  • Age: 47
  • Location: Denver, Colorado
Maybe they just want their marshmallow now:

https://www.youtube.com/watch?v=QX_oy9614HQ

LAL

  • Stubble
  • **
  • Posts: 160
lattes are never the problem.  $500 car payment, $500 student loans, and too much house mean you can't get ahead period.

MoneyCat

  • Handlebar Stache
  • *****
  • Posts: 1754
  • Location: New Jersey
lattes are never the problem.  $500 car payment, $500 student loans, and too much house mean you can't get ahead period.

I understand what you mean. When I started out on my journey, I was wasting $300/mo on a used Honda and paying only interest on my student loans because I thought I couldn't do any better. Then I discovered frugality and suddenly money appeared from "nowhere". It wasn't really "nowhere", though. It was the money I formerly wasted on borrowing money from banks, paying for "little luxuries" like coffee out or fast food or bottles of soda or DVDs and books. I stopped paying for cable TV too. Turns out that all that stuff added up to many thousands of dollars. Imagine that. Now I have a hefty bank account and stock portfolio.

The trick is understanding that no matter what Madison Avenue tells you, you CANNOT have it all. You can have a lot of it, especially the important stuff, but if you want to truly be happy, you need to recognize that you cannot have everything. And most of the stuff you think you need is actually worthless trash.

Spork

  • Walrus Stache
  • *******
  • Posts: 5753
    • Spork In The Eye
lattes are never the problem.  $500 car payment, $500 student loans, and too much house mean you can't get ahead period.

I have at least one good friend that spends > $500 a month on Starbucks.  I am sure her (new) car costs her at least $500 a month, too.... but lattes are seriously eating her future.

LAL

  • Stubble
  • **
  • Posts: 160
You can cut lattes that month if you were dead broke.  But it's not so easy to get rid of a car payment, student loan, or too much house. I hear more about OMG 40% or 50% house/rent payment.  And $500/month car payment is an Accord in many cases.  Instead try a Luxury car or Luxury SUV it's running more like $750-800/month payment not including maintenance, tolls, parking, fees, insurance, etc.  That's why people can't get out of debt, there is NO extra money left after paying just a car and rent and everything else is on CC.

And those are the hard things to change. It will take you longer to sell a house and get rid of car and drive a beater.  If you no longer have room on the CC it's hard to charge starbucks.  But I know people will pay first the rent and car payment and then starbucks.

But you can call and cancel cable.  Can't tell car company oh cancel my car I'm returning it.  Doesn't work that easily and people hate giving up their big house or luxury vehicle.  Or vehicle that has so much negative equity rolled into it.
« Last Edit: June 22, 2016, 09:43:08 AM by LAL »

Travis

  • Handlebar Stache
  • *****
  • Posts: 2371
  • Location: Arizona
lattes are never the problem.  $500 car payment, $500 student loans, and too much house mean you can't get ahead period.

I have at least one good friend that spends > $500 a month on Starbucks.  I am sure her (new) car costs her at least $500 a month, too.... but lattes are seriously eating her future.

That's the angle I take when I'm doing financial counselings at work.  Everyone knows how important buying food and paying for your car are. We do it every month like clockwork.  I see folks on a regular basis who spend a car payment every month on alcohol, cigarettes, and Starbucks.  Sometimes combined, but every now and then they spend a car payment worth on each of those categories.  When you frame it that way it can hit home to someone who is about to have their car repossessed and you show them they drank it away in beer and coffee.

tyort1

  • Handlebar Stache
  • *****
  • Posts: 2228
  • Age: 47
  • Location: Denver, Colorado
Yes, most people just want to be able to "cover the bills", but they accumulate bills over time and those bills always seem to creep up to whatever total $$ they are earning.  Cutting back is often painful if there's job loss or income loss.  Let's not lose site of one thing - people like these luxuries.  So they pay for them.  They would rather pay $$ now for a luxury than forgo the luxury to save money. 

Because for them, saving money is not meaningful.  Saving money for what?  "Isn't money for enjoying life?"  So having money in the bank doesn't represent financial freedom, it represents a whole lot of missed spending opportunities !

libertarian4321

  • Handlebar Stache
  • *****
  • Posts: 1369
Not only did she intentionally completely miss the main point, she CHERRY PICKED her numbers, even after accusing others of doing that.

For example, when she tried to show "you can't really get a long term average of 10%," she started at a market top in 1929 and ended at the market bottom in 2009. 

Why did she choose 1929 to 2009, when the article was written in 2016?  Because those dates gave the absolute worst possible return (9%).  Had she chosen a more logical time period (say 1935-2015) the returns would have been well in excess of 10%- but that wouldn't have fit the narrative. 

BTW, the author has NO FINANCIAL QUALIFICATIONS at all.  She's not a financial expert, she just plays one on the internet.

She's just another liberal hack out there promoting Slate's left wing political agenda.

'Cause frugality, discipline, and succeeding on your own don't fit the liberal "you can't do it, you must rely on mother government" agenda...

And FWIW, you CAN cherry pick the numbers so so that one could reach a million dollars on lattes alone- though as I said, that wasn't really the big picture point that is being made.

seathink

  • Stubble
  • **
  • Posts: 109
  • Age: 37
  • Location: Los Angeles
Not much to add, but over the years I've been able to point out to MANY coworkers that they spend as much on coffee and lunches as I do traveling all over the world, if not more.

Maybe that's actually a better yardstick.  You tell someone their coffee costs them $18k over 10 years and they just hear Charlie Brown's teacher.  (Wah wah wah wah wa.) 

Maybe money/compound interest is too abstract a concept for some... and using concrete comparisons of "world travel" vs Starbucks is a better method.

I read a blogger who would do this with clothes. Every nice piece would be held up and the corresponding plane ticket price was calculated. Oh what a great dress. Oh look at that price, one way to London, NY, Vegas, etc. Treats easily equal plane tickets.


Re the article, I've always believed in the latte factor because I saw it every day in high school (PNW, late 90s, coffee central). Upper Middle Class kids come in with huge latte ($4), pull 20oz soda out of machine between every period ($4.50), walk to Pizza Pipeline/McDonalds/etc. every lunch period ($4.50), and carry a 32oz water bottle full of vodka swiped from mom and dad ($10? $15? $20?).

But yeah, author of article, I'm sure habits started at 16 won't follow someone through their life. (Well, hopefully the 32oz vodka did not follow my peers to their jobs!!)