Stop The Press! Mainstream Loves Latte

Oh, dear latte! You have been crucified. Fear not, Mr. TFR at your service. Always keep me happy with your frothy texture and warm liquid company.

Oh, dear latte! You have been resurrected!

Regular readers of TFR know how passionate (‘obsessed’ is apparently the right word, as my friends have helpfully suggested) I am about my morning cafe latte. The few minutes of liquid companionship I get with its characteristic warmth and aroma and its complex, rich taste intertwined with steamed milk – in a marriage made in heaven officiated by your barista – are one of the few simple pleasures in life I look forward to.  It has perked me up on many a cold and depressing morning.  ‘Cold’, of course, is due to weather god and ‘depressing’ is due to the gods at work.  The latte has been my faithful companion on many such days.

My article on sensible frugality explains the flawed Latte math that mainstream financial papers and magazines continue to propagate.   I wanted to share with you all a refreshing change in that thinking.   Naturally, my I-told-you-so feeling was rather strong after seeing a mainstream newspaper agreeing with my premise. 

USA Today has published a video explaining their re-thinking.   The video starts off in the usual way about how a $5 Starbucks latte can pay for a bottle of Champagne (in 10 days), the latest iPhone 7 (in 8 months), and how sacrificing it is worth $46,000 over 10 years in your 401(k).   This part was predictable and it got my Latte sensibilities up wanting to write to their Money section editor.  Then comes the interesting admission.  The video later acknowledges that the daily latte doesn’t necessarily have to destroy your finances.  They mention hospital bills, job loss or divorce can ruin your finances.   That is all true, but latte is the last of your worries should any of these calamities come to pass.  That’s not the trade-off decision a person is faced with on a daily basis!   

If they had consulted with me, I would have told them instead of scaring people about unknown health risks or divorce (which may not happen if you followed simple money rules), why not be straight with the public about the new cars and over-leveraged house purchases as much more likely causes of financial ruin?  Some people become millionaires and still don’t buy a house, or likely because of it! 

Everybody knows health care costs can be a bomb and so, have insurance.  For most people, if planned well, the real nasty healthcare bills are covered to a large part either by insurance or by government (Medicare/Medicaid programs in U.S. and nationalized health care systems in many other countries).  Well, job loss is unlikely if you are a career-conscious renter, and even if it does happen, there is unemployment insurance to tide you over or better yet, your finances will be in great shape to handle it as an early retirement opportunity, especially after negotiating a severance package.   They should not be driving your latte decision.   

I guess the truth about new cars and expensive houses would hurt their advertising revenues.  After all, most of what we see in the papers are ads for new cars and car dealerships, not to be outdone by the real estate listings and zero down/low downpayment mortgages.  

USA Today’s famous tagline is Economy of Words, Wealth of Information.   They got the first part right with the video, but the second part is missing by a mile.  By not presenting the true information about the major financial risks in common decisions about cars and houses, they are doing a disservice to the underlying message.  The only reason you are now told to continue your latte is that you don’t know if you will get sick, split up and possibly lose your job – all are good reasons to actually enjoy the latte!

To me, the math is as obvious as this.



So, go ahead, enjoy your latte – guilt free! Its frothy texture and soothing company suddenly feel vindicated in my mouth as I savor it now.   I feel you, my liquid friend!

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8 comments on “Stop The Press! Mainstream Loves Latte”

  1. By Mustard Seed Money

    I think too often the media tries to make relateable posts by saying cut out one thing and you’ll be a millionaire. Too often the media skirts over more “complex” topics that would really save individuals money. I.E. Take a look at the fees that you’re paying on your mutual fund or ETF to make sure that it’s in line with that of their competitors. Looking at fees alone would save thousands of dollars for an individual over their lifetime.

  2. By Rajkumar

    Nice post mate, I must say I enjoyed reading this and unlike most of the people I brew my own coffe with a lot of added ingredients. Not because I hate artificial flavours but I like to prepare on my own. That moment when I sip my own made coffe is quite good.

    Keep writing more articles,

    Have a good day!

    • By TFR

      Thanks Rajkumar for stopping by. Your coffee and possibly, financial, sense deserve a clap! 🙂

  3. By Matt @ Optimize Your Life

    I feel like the typical “cut the latte” advice comes from a place of assuming that it is mindless spending that people don’t even notice anymore. From your very visual description in the first paragraph it sounds like you consciously and actively find happiness in your lattes. As long as they are still bringing you happiness I don’t see a real reason to cut them out.

    I used to automatically buy lunch every day at work. Eventually I realized that I didn’t even really enjoy it any more – it was just the thing that I did. Why should I spend money on something that doesn’t actually make me happy? Sounds like your latte situation is very different.

    • By TFR

      Thanks Matt. We all have our vices and good coffee is mine. We make gourmet coffee at home as well in the old fashioned method, using fresh grinds and Turkish percolator, and we enjoy it far better than other coffee. But that still doesn’t match a well done latte. If we had no spending vices at all, it may be possible to retire very early but I have put retiring well ahead of retiring early.

  4. By The Green Swan

    While it may not be the worst financial decision you could make, it doesn’t necessarily help. And by going out for your latte it may be easier to say that you’ll just go out for your lunch and dinner too, perhaps a slippery slope there.

    But for someone like you who sounds like he enjoys his latte quite a bit ;), I’m sure you’ll find room in the budget for it and not let it set your retirement back an extra year or two. We all have our spending priorities. Thanks for the post!

    • By TFR

      Thanks GS. I take packed lunch from home and rarely eat out, perhaps once a month as family. If I eat lunch or dinner out beyond that, it’s usually on the company dime entertaining some client. I clearly don’t see my retirement horizon extended due to my Latte passion.

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