Saving money… one latte at a time

It is distressing, to say the least, to realize how unwilling most people are to live below their means, and save and invest money for their future. For many people, it’s not just an inability to save, it’s an unwillingness to live on less than they earn, and set money aside a portion of their money for their future. I got a glimpse of this while trying to pitch my latest book this week.

As you may already know, I have another book in the “For the Rest of Us” series coming out in early December: Building Wealth for The Rest of Us. Recently, I approached a very well-known, very well-followed website to see if they would be interested in learning about my book and introducing it to their readers. (I’m going to leave out the name of the site as it’s not the important takeaway here.) This website’s editor promptly replied to my inquiry and indicated their interest. They asked me to present an outline for an article based on one of the key points in the book.

Which point? That’s easy. To me, one of the most important subjects in the book is compounding. I have discussed this topic several times, most recently when the Cubs got into the World Series. If you (or your relative) invested money the last time the Cubs won, you’d have a lot of money. A $100 investment in the S&P 500 in 1908 — the last time the Cubs won the series — would be worth well over $2.1 million today! How? Compounding. If you are interested in learning more about compounding, you can read this article.

A Million Dollars on $10 a Day

The story I pitched: If you put aside ten dollars a day, you could eventually be a millionaire. While it won’t happen overnight, it wouldn’t take as long as it took the Cubs to win the Series again. Based upon historical stock market returns, a ten dollar a day investor could be a millionaire in about 35 years. That means a 30-year old could put aside ten dollars a day, invest it in an S&P 500 index fund, and reach their retirement age with over $1 million.

The story idea was rejected. The reason given was that most of their readers don’t have ten dollars a day to invest. This website has literally millions of followers. It was disheartening to hear that most people don’t have ten dollars a day to invest in their future.

I understand that, in aggregate, ten dollars a day — or $3,650 a year — is a considerable amount of money. I understand that few among us have $3,650 lying around every year to invest. I get that, but when viewed as just ten dollars a day, I have a harder time understanding this behavior.

People have no problem going to a coffee shop for their daily cup or two. How much do you spend every day at your coffee shop of choice? Five dollars a day? Eight dollars? Perhaps even ten dollars a day? Instead of buying coffee at a coffee shop, how about making it at home before you leave for work? Alternatively, you could probably have coffee where you work. It might even be complimentary. Instead of spending five or ten dollars a day on coffee, why not put that fin or sawbuck (old guy speak for a five dollar bill and a ten dollar bill, respectively) into a piggy-back. Do that every single day instead of spending a few bucks on coffee at a coffee shop. Guess what, at the end of the year, you would have a few thousand dollars. Take that money, invest it. Do this every year. Eventually, you can be a millionaire. The same thing could be said about having lunch out at work every day. You are probably spending at least ten dollars a day on lunch in a restaurant. Brown bag your lunch and (piggy) bank your lunch money. I’m not suggesting that you become a social outcast and never socialize with friends of coworkers. I’m also not suggesting these are the only ways to save money. They are many, many other ways that people spend money unnecessarily. Can’t save ten dollars a day? I find that hard to believe. However, if that’s the case, put aside five dollars a day; three dollars… whatever you can. Put aside money for your future. Make it a priority.

It’s disheartening that most people are unwilling to live below their means. They might say they are unable to save money. I believe it’s a choice. Actually, it’s a series of choices. Every time you purchase something, you are making a choice. You can buy a dozen and eggs for a couple of bucks and cook them yourself, or you could go to the local diner and cumulatively spend no less than five times what those eggs cost you at the supermarket. It’s all about choices. If I told you that you could be a millionaire simply by eliminating your daily coffee at the cafe habit, wouldn’t you do that? That’s such a simple lifestyle adjustment. Unfortunately, the website that I approached with this idea felt that their readers — and they have a lot of readers —  simply didn’t have ten dollars a day to invest in their future. Maybe they are correct.

Maybe people lack the free cash to set money aside for their future. Maybe their expenses are so high that they have no available cash to carve off to save and invest for their future. Maybe that true. Perhaps it isn’t really the case. Maybe it’s just a mindset. People like spending money. It feels good to go on vacation. It feels good to buy nice new things. Who doesn’t like getting delivery packages in the mail? I am not suggesting that people should deprive themselves of everything. I find it hard to believe that can’t set aside a few dollars every day to save and invest for their future.

While living below your means is simple conceptually, it’s tough to put into practice. Everyone understands the concept of dieting. Eat fewer calories, burn more calories, lose weight. If you lose one pound a month, you can drop 36 pounds in three years. Conceptually that’s easy, but in practice most people can’t seem to accomplish this. We are always looking for a quick fix. The latest fad diet, pill, piece of exercise equipment, etc. The quick fix doesn’t solve the problem. Slow and steady wins the race. Lose a little weight each month and eventually you will lose a lot of weight. The same can be can be said about people and money.

Americans spend $70 Billion on lottery tickets

Why does the lottery exist? Because people want to dream that they can become rich. A lottery ticket costs just two dollars. How much to people spend each year on the lottery? The average American adult spends $300 every year on the lottery. Does everyone play? No. Assume that only one-third of Americans play the lottery, that means that those people are spending $900 a year on lottery tickets. That’s $900 which could be invested for their future. Okay, that’s not $3,650 a year, that’s only about one-quarter as much, but it’s just an indication of how people spend money which they don’t need to spend; money which could be invested for their future. By the way, that $300 amount that the average American spends on the lottery each year means that we spend over $70 BILLION on the lottery, each and every year.

Lottery and Lattes

A few lottery tickets and a few cups of coffee each week are meaningless in and of themselves, but people can’t see how a setting aside a few dollars a day can help them become financially comfortable later in life. They can’t get themselves to live below their means. People can’t set aside a few dollars every day or every week. Automatic savings and investing (i.e. a 401(k) account) is definitely the easiest way to save and invest. The money gets pulled from your paycheck and invested automatically. It takes the need to be disciplined out of the equation.

Spending less than you earn and investing the rest is such an obvious concept to me. I’ve understood this my entire life. It was ingrained in me by my depression-era parents. It saddens me to think that most people don’t operate this way, but I am optimistic. I am hopeful that by making a few simple changes to the way people spend their money, they could be ready, willing, and able to set aside money. To live below their means. To build wealth.



  1. Paulie November 26, 2016
    • David L. Wright November 27, 2016

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