Latte Factor Investment Calculator
Daily Expense to Investment
See what your daily expense could become if invested
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Savings Goal
How many daily lattes to give up to reach a goal
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years
Formula
Future Value = Monthly Savings x ((1 + r)^n - 1) / r | where r = annual rate / 12, n = years x 12
Frequently Asked Questions
What is the Latte Factor?
The Latte Factor is a concept coined by financial author David Bach. It illustrates how small, seemingly insignificant daily expenses (like a latte) can add up to enormous sums over time, and how redirecting that money into investments can build significant wealth.
Can skipping coffee really make me rich?
While the math is real, it is about the principle, not just coffee. Saving $5/day ($150/month) invested at 7% return grows to about $76,000 in 20 years or $176,000 in 30 years. The key insight is that all small recurring expenses compound over time.
What is a realistic return rate to use?
The S&P 500 has historically returned about 10% annually before inflation, or about 7% after inflation. A conservative estimate of 6-7% is commonly used for long-term investment projections.
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