What is the Latte Factor?
Coined by David Bach, the "Latte Factor" is the idea that small, everyday expenses like a $5 latte, a pack of cigarettes, or a quick snack can add up to huge sums over time if you invested that money instead.
This concept isn't about depriving yourself of all joy; it's about being aware of where your money is going and understanding the power of compounding.
How to Use This Calculator
Think about a small, recurring expense you have. Enter the cost and the frequency of that expense. Then, choose an expected annual return and see how much that money would be worth in 10, 20, or 30 years.
- Identify small daily expenses
- Understand the opportunity cost of spending
- Visualize the power of consistent investing
- Make more intentional spending decisions