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The "Starbucks latte" factor The "Starbucks latte" factor
by Joseph Gatt
2020-07-18 08:59:16
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Currently reading David Bach's “the automatic millionaire.” Although it's an interesting book, I'd add my own two cents to the book.

What David Bach discusses is how if people avoided their morning Starbucks (or other coffee chain) overpriced latte; they'd save a lot of money. Now Bach's book is a little confusing at times, because of many omissions: for example, if people stop consciously buying their 6 dollar latte in the morning, they might spend the money elsewhere.

star001_400So let me “redefine” the “latte factor” here. My definition of the “latte factor” would be anything people spend too much money on, without being conscious, and that they would save a ton of money if they stopped making those purchases.

Examples of “latte factors.”

-The bar

If people budgeted carefully, a lot of men, and quite a few women, would realize that the bar tabs represent a significant expenditure that they could technically do away with.

Why not convince your friends to meet at the coffee shop to chat, and drink a couple of beers or a glass of wine at home if you need to.

By avoiding bars, you could save 500 dollars a month or more, which add up in the budget.

-The club

You have the entrance fee, you pay for the drinks. And for those addicted to clubs, you have all kinds of “special parties” with “famous guests” that can cost you a fortune.

Avoid clubs and you'll be saving another 500 bucks a month or more in many cases.

If you're a “weekday nights at the pub” and “weekend nights at the club” kind of guy/girl, you could be saving 1,000 bucks a month. That's 12,000 a year! In many cases more!


If you cook your own breakfast, take a lunch box to work, and dine at home, you'd be saving a ton of money.

Some people spend as much as 2,000 dollars a month or more eating out!

-The travel bug

You probably don't notice travel in your budget because you only travel once a year or twice a year (perhaps three times a year).

But that overseas trip can cost you 2,000 to 5,000 dollars a year (or more!).

-The fashion trap

All fashion brands try hard to make last year's fashion outdated this year. So you have all those people in the media and social media reinventing fashion, and you have to go out and get yourself a new wardrobe every year.

Or perhaps it's all that dining out that means you need a new wardrobe every few months.

Either way, if you calculate your budget, fashion items can cost you up to 5,000 dollars a year or more. That's too much!

-The electronics trap

Just like fashion, electronics (smartphones, tablets, printers, laptops etc.) like to brand themselves as being outdated after a year.

Keep that laptop and smartphone for as long as you can, or even better, get a cheap laptop and dumb phone and keep those for a very long time.

Amount you could save on avoiding keeping “up to date” with electronics: up to 5,000 dollars a year!


What I sarcastically call charity is all those subscriptions you pay for but don't use. Could be a newspaper that you never read. Could be gym membership when you never go to the gym. Could be foreign language classes you drop out of after one or two classes.

My advice: avoid subscriptions if you can. Jog at the park, only learn a foreign language if it's absolutely necessary (or if your company is paying for your classes) and read newspapers online.

Some people spend up to 5,000 dollars a month on “subscriptions” they never show up to.

Conclusion: Where I disagree with David Bach is he seems to imply that most people only have “one” latte factor. That is people only spend useless amounts of money on “one” thing.

No. You see all the things I've listed above? Many people spend too much money on ALL of the above. So if you do away with these “latte factors” you're not just saving 5 bucks a day, you will probably be saving 30,000 dollars a year or more!  

Bonus: “the latte factor” for businesses

A few “latte factors” that many businesses have

-Company dinners and business dinners

Some companies spend HUGE amounts of money entertaining clients and getting them drunk.

Problem is. You don't win at business over dinner with clients and getting them drunk. You win at business over clear rational deals discussed while being completely sober at a meeting room or board room.

-Maintenance and construction

Some companies throw away computers when they start slightly dysfunctioning. Or have construction work done just because there's a stain on the floor, and they have the floor redone completely.

It can add up to a lot.

-Real estate

Some companies like to keep relocating to better offices, or to purchase bigger, better offices, or to add new offices to the old ones.

First problem: many employees quit over the move and get a different job because they dislike the new commute to their new office. Second problem: clients are disoriented by the move. Third problem: the move costs a lot of money.

-Special bonuses and free money!

Most employees would rather negotiate a raise or amendments to their work contract. But some companies have an excellent year and like to “throw” money at employees.

The way I would work is to make it sound like we had an OK year and could do better. By giving away huge bonuses to celebrate an excellent year, you're really telling your employees that they can rest on their laurels, or take the huge bonus to start their own business, which will leave you with hiring new employees you will have to train from scratch.

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