A Man’s Take on the Latte Factor

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Have you ever heard of the Latte Factor? It’s what my financial advisor buddies use to describe how giving up a latte every day (~$4) will turn you into a millionaire over a life of investing.

Here’s a man’s take on that idea – presented in a simple interview format:

Lady Interviewer: Do you drink every day?
Man: Yes.
Lady Interviewer: How much a day?
Man: Around 3 six-packs starting at noon.
Lady Interviewer: How much does a 6-pack cost?
Man: Roughly $10.00 at a deli.
Lady Interviewer: And how long have you been drinking like that?
Man: 15 years.
Lady Interviewer: So with a six-pack costing $10.00, and you consuming 3 six-packs a day, you are spending roughly $900 each month. In one year, you would then be spending $10,800, correct?
Man: Correct.
Lady Interviewer: If in 1 year you spend $10,800 on beer, not accounting for inflation, 15 years puts your spending roughly $162,000; correct?
Man: Correct.
Lady Interviewer: Did it ever occur to you that if you did not drink for the last 15 years, you could have bought a Ferrari?
Man: Do you drink?
Lady Interviewer: No.
Man: So where’s your damn Ferrari?

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