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> “Let’s say you spend around $100 on coffee each month. If you were to put that $100 into a Roth IRA instead, after 40 years the money would have grown to arou

> “Let’s say you spend around $100 on coffee each month. If you were to put that $100 into a Roth IRA instead, after 40 years the money would have grown to around $1 million with a 12 percent rate of return.” ...why not both? :-) But seriously, coffee is a drop in the bucket. Most of us spend 30% of our income on housing alone. And you have to eat. And coffee makes us happy and productive. The cost of not having that coffee - being unproductive and unhappy - is much greater. And of course, what's the end goal? Have the most money at the end of your life? What do you win for that? Nothing. Your goal should be to spend all of your money living the best life you can, with enough money to retire on and enjoy the lifestyle you want (with a rainy day fund, of course). Teach your children what they need to know to succeed, so none will need to depend on any inheritance, and leave them whatever property or money is leftover.

neogodless 8y ago
Both should be "coffee" and "saving" - not $5 coffee and maybe saving. In other words, if you figure out how much you need to retire at the lifestyle you want, in the time frame you want, and put the money into your investments (retirement, brokerage, etc) and then pay all your bills and then you have $5/day to spend on coffee, go to town. If, instead, you spend $5/day on coffee, pay your bills, and don't have any money left over each month, so you skimp on your retirement contributions, you've lost control of when and how you retire. The end goal for any conscious saver is not "the most money at the end of your life" but almost certainly something more meaningful and useful. Retirement when and how you want! Having retirement accumulate faster such that you have enough to retire when you're 55 instead of 65 means 10 years of meaningful autonomy over your life. Of course that probably isn't possible if $5 coffees interrupt your retirement plans entirely. There's a spectrum of incomes, cost of living and what your optional spending looks like.
- PButtNutter 8y ago
  Right, but if all you are saving is $5 a few times a week you aren't really saving... and that's the point the article is making.
  - neogodless 8y ago
    The math seemed pretty compelling. Even $100/month invested in index funds returns several hundred thousand after a few decades (or the typical working career.) Should you ONLY skip daily lattes but living beyond your means otherwise? Of course not! But it's just one of many places to start making changes in your life towards the things that really matter to you.

neogodless 8y ago

Both should be "coffee" and "saving" - not $5 coffee and maybe saving. In other words, if you figure out how much you need to retire at the lifestyle you want, in the time frame you want, and put the money into your investments (retirement, brokerage, etc) and then pay all your bills and then you have $5/day to spend on coffee, go to town. If, instead, you spend $5/day on coffee, pay your bills, and don't have any money left over each month, so you skimp on your retirement contributions, you've lost control of when and how you retire. The end goal for any conscious saver is not "the most money at the end of your life" but almost certainly something more meaningful and useful. Retirement when and how you want! Having retirement accumulate faster such that you have enough to retire when you're 55 instead of 65 means 10 years of meaningful autonomy over your life. Of course that probably isn't possible if $5 coffees interrupt your retirement plans entirely. There's a spectrum of incomes, cost of living and what your optional spending looks like.

PButtNutter 8y ago
Right, but if all you are saving is $5 a few times a week you aren't really saving... and that's the point the article is making.
- neogodless 8y ago
  The math seemed pretty compelling. Even $100/month invested in index funds returns several hundred thousand after a few decades (or the typical working career.) Should you ONLY skip daily lattes but living beyond your means otherwise? Of course not! But it's just one of many places to start making changes in your life towards the things that really matter to you.