Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Buy Yourself a Latte

ritholtz.com

Post reply on HN
Print view View original

151–160 of 351 posts

Re: Buy Yourself a Latte

#151

Post by puranjay »

I find that the author seems to speak far too much from his own entrepreneurial perspective.

If you have that bent of mind, as so many of the people here do, you always think of money as an investment. You can rationalize a $5 latte purchase if it means you are more productive at work.

But the average guy working a regular job on a fixed income doesn't and shouldn't see money the same way, especially if there is no corporate ladder to climb anymore. What's a $5 cup of coffee do for a line cook at McDonald's except give him a momentary dopamine kick?

Re: Buy Yourself a Latte

#152

Post by pascalxus »

1800$ per year will adds up to a lot for anyone still working. if you earn 20K after taxes then that's 9% of your income! If you earn 140K before taxes, 100K after taxes that's still almost 2%! that's almost enough to pay rent for a whole month in many parts of the country!

Re: Buy Yourself a Latte

#153

Post by parthdesai »

falcolas wrote: post #124
parthdesai wrote: post #93

Earlier quoted context omitted.

>Most salaried folks stick to a fixed set of working hours. We also browse internet, spend ungodly amount of time on fb/insta/whatsapp/HN/reddit while at work. Taking out 5 mins to make a coffee isn't that significant.

> Taking out 5 mins to make a coffee isn't that significant. No, it's not. Just as spending $5 on a latte every day isn't that significant either (for the assumed "average tech worker").

That's $100/$200 a month depending on how many coffees you drink per day. That is 4-5 nice meals in a restaurant. It sure is significant for me.

Re: Buy Yourself a Latte

#154

Post by DoreenMichele »

thaumaturgy wrote: post #149
DoreenMichele wrote: post #112

Earlier quoted context omitted.

that $5 a day adds up The article isn't advocating that you buy a coffee every single day. It's saying a. focus on larger issues and b. it's okay to do a little self care and a little self indulgence. I sometimes bought myself a fucking coffee of some sort at Starbuck's back when I was homeless. I needed the caffeine to help treat health issues. It let me plug in for an hour and get some electricity for my tablet, pl…

There was an illustrative article on this topic a few years ago [1]: "It’s not like the sacrifice will result in improved circumstances; the thing holding me back isn’t that I blow five bucks at Wendy’s. It’s that now that I have proven that I am a Poor Person that is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purcha…

I imagine a lot of people saying "Just give up your $5 coffee and you, too, can be a millionaire someday!" are trying to be realistic without being wrist-slashingly depressing about life.

But it amounts to left-handedly saying "The big problems in your life/ the world that make your $5 coffee An Issue for your budget? Yeah, honey, you can give up on solving those. Justice just ain't a thing."

Re: Buy Yourself a Latte

#155

Post by puranjay »

twblalock wrote: post #100
ineedasername wrote: post #46

If part of your audience consists of people living without much a safety net, that $5 a day adds up. Also, the author's point that saving that much isn't going to be $1 million, but "only" as much as $500,000 then that point rather falls flat. Sure, inflation may decrease the utility of that amount of money, but it will also increase the cost of that latte, so you'll be saving more than just the $5 over time. Finally…

The point is to focus on the big wins. Save $1000 next time your buy a car and that covers almost a year of $5 lattes every weekday morning. If you overpay on your next car, or negotiate badly on your next job offer, the money you saved by not buying lattes was all for nothing. In other words, major financial decisions vastly outweigh the impact of a daily $5 purchase, so why focus on the small stuff? Yet much financ…

Why not do both? Save $1000 in coffee and another $2000 in car purchases.

It's not like having an expensive cup of coffee has been an intrinsic part of human life forever. It's not even a 50 year old phenomenon.

There are certain things you should treat yourself on, but a cup of coffee is too insignificant a hill to die on. Especially since I'm not sure how many people buy lattes everyday because they truly love lattes, and not because it is an extremely well marketed product.

Re: Buy Yourself a Latte

#156

Post by puranjay »

ineedasername wrote: post #48
falcolas wrote: post #43

Earlier quoted context omitted.

You're exchanging time for money. It's a highly common tradeoff. Prep, brewing, and cleanup amounts can work up to around $3-4 of opportunity cost for a tech professional. Not to mention, french press coffee is not quite equivalent to a latte. Also, I recommend 5 minutes steeping, personally. ;)

Not sure how much time you save. Standing on line and waiting for that latte would take a comparable amount of time to what it takes me to make my own cup at work.

But then how will you tell everyone on Instagram that Starbucks got your name wrong again

Re: Buy Yourself a Latte

#157

Post by ashelmire »

> “Let’s say you spend around $100 on coffee each month. If you were to put that $100 into a Roth IRA instead, after 40 years the money would have grown to around $1 million with a 12 percent rate of return.”

...why not both? :-)

But seriously, coffee is a drop in the bucket. Most of us spend 30% of our income on housing alone. And you have to eat. And coffee makes us happy and productive. The cost of not having that coffee - being unproductive and unhappy - is much greater.

And of course, what's the end goal? Have the most money at the end of your life? What do you win for that? Nothing. Your goal should be to spend all of your money living the best life you can, with enough money to retire on and enjoy the lifestyle you want (with a rainy day fund, of course). Teach your children what they need to know to succeed, so none will need to depend on any inheritance, and leave them whatever property or money is leftover.

Re: Buy Yourself a Latte

#158

Post by biesnecker »

devoply wrote: post #94
biesnecker wrote: post #80

Earlier quoted context omitted.

I read this very differently -- if $5/day makes up a significant portion of your safety net spending, then you have much larger problems than the $5 delta your latte is causing. It's not that $5/day doesn't matter to anyone, it's that the people for whom it matters are facing much larger systemic issues that we're ignoring while shaming people for the smallest of luxuries. edit: missing word

If you are 20 years old and you start putting away $5/day and have 500k in the bank at 60. Who can argue with that. In fact they should pass a law to make this mandatory on everyone. It would greatly improve the lives of literally everyone.

Sure, but if you had affordable education and housing and healthcare, and real wage growth that kept up with productivity increases, you'd have millions in the bank AND you'd have a latte every day.

Re: Buy Yourself a Latte

#159

Post by fencepost »

kemitche wrote: post #102
devoply wrote: post #94

Earlier quoted context omitted.

If you are 20 years old and you start putting away $5/day and have 500k in the bank at 60. Who can argue with that. In fact they should pass a law to make this mandatory on everyone. It would greatly improve the lives of literally everyone.

What do you think Social Security is?

An insurance program for which you pay premiums while you're working, and which may later pay you a monthly amount based on your income while working, your age when you start receiving it, and a few other things.

Also, a way to reduce homelessness and poverty among (primarily) the elderly by providing them with money to live on rather than letting them die of exposure on someone's porch then paying to haul away the corpses.

For those truly opposed to it imagine not only having to have the occasional dead body hauled away but then being charged for that haulage because hey, big government is bad and why should you have to pay for dead bodies being hauled away when they're not on your porch?

Re: Buy Yourself a Latte

#160

Post by neogodless »

ashelmire wrote: post #157

> “Let’s say you spend around $100 on coffee each month. If you were to put that $100 into a Roth IRA instead, after 40 years the money would have grown to around $1 million with a 12 percent rate of return.” ...why not both? :-) But seriously, coffee is a drop in the bucket. Most of us spend 30% of our income on housing alone. And you have to eat. And coffee makes us happy and productive. The cost of not having that…

Both should be "coffee" and "saving" - not $5 coffee and maybe saving. In other words, if you figure out how much you need to retire at the lifestyle you want, in the time frame you want, and put the money into your investments (retirement, brokerage, etc) and then pay all your bills and then you have $5/day to spend on coffee, go to town. If, instead, you spend $5/day on coffee, pay your bills, and don't have any money left over each month, so you skimp on your retirement contributions, you've lost control of when and how you retire.

The end goal for any conscious saver is not "the most money at the end of your life" but almost certainly something more meaningful and useful. Retirement when and how you want! Having retirement accumulate faster such that you have enough to retire when you're 55 instead of 65 means 10 years of meaningful autonomy over your life. Of course that probably isn't possible if $5 coffees interrupt your retirement plans entirely. There's a spectrum of incomes, cost of living and what your optional spending looks like.

Post reply on HN