You don’t need to give up coffee to save money
Personal finance advisor David Bach says if you skip coffee every morning and invest that money instead, you’ll be a millionaire by retirement. Another personal finance author, Helaine Olen, said the maths on this concept doesn’t add up. At $5 expenditure every single day over 30 years and assuming a generous eight per cent annual return for investing that money, the potential interest comes out to around $171,000 on top of $54,000 in coffee savings. That’s not enough to retire on.
The broader lesson should be that reducing expenses overall is better. Opt for a cheaper house, cheaper TV deal or cut big expenses.