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Buy Yourself a Latte

ritholtz.com

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Re: Buy Yourself a Latte

#161

Post by devoply »

biesnecker wrote: post #158
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.

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.

what would it take to make that happen? what would it take to make this happen? it's funny people are happy to let creditors tax everyone at 20% (like a shitty credit card with a 2k limit is what's used to buy lattes), but bring up generating real wealth for a huge percentage of the population that has nothing, and oh noes this is against everything we stand for. this is why we can't have nice things. minimum income, yes, forced savings, no. yes i would like 2k per month for free, but no i don't want to save 2k per year so i can have 500k when i am 60.

Re: Buy Yourself a Latte

#162

Post by PButtNutter »

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…

Thats not the point the author is making.

The point being made is that if all that is stopping you from financial ruin is a $5 coffee a few times a week, you're pretty much already in financial ruin. The coffee really isn't and shouldn't be the thing making the difference.

Re: Buy Yourself a Latte

#163

Post by SketchySeaBeast »

negamax wrote: post #53

Depends on the people $5 x 20 days = $100 a month = $1200 a year. That's not a small amount

One of his points is "Focus on large fixed costs, not small discretionary ones", so while that isn't a small amount, that might be half how much your mortgage costs a MONTH. Until you optimize the mortgage, the coffee is less of a concern.

Re: Buy Yourself a Latte

#164

Post by PButtNutter »

neogodless wrote: post #160
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 mo…

Right, but if all you are saving is $5 a few times a week you aren't really saving... and that's the point the article is making.

Re: Buy Yourself a Latte

#166

Post by biesnecker »

devoply wrote: post #161
biesnecker wrote: post #158

Earlier quoted context omitted.

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.

what would it take to make that happen? what would it take to make this happen? it's funny people are happy to let creditors tax everyone at 20% (like a shitty credit card with a 2k limit is what's used to buy lattes), but bring up generating real wealth for a huge percentage of the population that has nothing, and oh noes this is against everything we stand for. this is why we can't have nice things. minimum income,…

> What would it take to make that happen?

Dismantling the capitalist system and giving workers control of the means of production? Or at least taxing capital at the same rate as income? I'm not entirely sure in which direction your sarcasm is running, but if that's what you're proposing, count me in.

Edit: nevermind, your edit makes it clear that we disagree here.

Re: Buy Yourself a Latte

#167

Post by glitchc »

DoreenMichele wrote: post #148
degrews wrote: post #141

Earlier quoted context omitted.

> 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 agree. But I don't think the people making the argument for spending less money on coffee are arguing against those two things. They are not talking about never going to a Starbucks. As you point out, there are circumstances where buying…

“The law, in its majestic equality, forbids rich and poor alike to buy $5 lattes unless they have already socked away 15% of their income into a retirement account, have at least 6 months of salary in a savings safety fund, and generally live about 10% below their means or can manage to articulately justify it to internet strangers as somehow having gotten a lot out of it while homeless.” ― Anatole France's great, gr…

Thank you for this.

Re: Buy Yourself a Latte

#168

Post by PButtNutter »

jfk13 wrote: post #11
MuffinFlavored wrote: post #5

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns > Total Annual Return Including Dividends 10.53% > 25 Year Annualized Return 11.93%

Sure, that's nice. (Although it seems to have been heading somewhat lower for the past decade.) But if you'd started investing in 1998, say, and then in 2008 something happened such that you unexpectedly needed access to your 10 years' worth of accumulated resources, things wouldn't have looked so rosy. Overall, the long-term trend may be pretty reliably positive. But that's little comfort to an individual who may no…

Right, and most of the gains will be in the last year because exponents - so if you have to pull out early those gains are ded.

Re: Buy Yourself a Latte

#169

Post by felipemnoa »

bluedino wrote: post #107
bonestamp2 wrote: post #82

Earlier quoted context omitted.

It is an interesting phenomena, because it's a relatively expensive product for what it is, but it's also an experience. Even though my wife and I do quite well financially (and save plenty for ourselves, our kids college, etc), I noticed we were spending "too much" on espressos and lattes. Not too much for our financial situation, but too much for my comfort level at least. So, we bought a $600 espresso machine, whi…

I could drink coffee/tea at home - but I use going to get a drink as an excuse for getting out of the house for a bit.

The fee of a Starbucks coffee is just the price of a co-working office space in my case. Well worth it. Much cheaper than using WeWork.

Re: Buy Yourself a Latte

#170

Post by neogodless »

PButtNutter wrote: post #164
neogodless wrote: post #160

Earlier quoted context omitted.

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 mo…

Right, but if all you are saving is $5 a few times a week you aren't really saving... and that's the point the article is making.

The math seemed pretty compelling. Even $100/month invested in index funds returns several hundred thousand after a few decades (or the typical working career.)

Should you ONLY skip daily lattes but living beyond your means otherwise? Of course not! But it's just one of many places to start making changes in your life towards the things that really matter to you.

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