
“Don’t buy lattes.”
This classic snippet of personal finance advice isn’t specifically anti-Starbucks. “Lattes” are a metaphor for the tiny expenses that leak money from our pockets, often without us realizing how much we’re spending.
Your “latte” could be a pile of subscriptions: HBONow, YouTube Red, Spotify Premium, Netflix, Hulu Plus, the CostCo membership that you haven’t used in two years, and — for that matter — the gym membership that you also haven’t used in two years. (Ahem.)
Your “latte” could be buying bottled water and snacks at the airport, or absentmindedly shopping online when you’re bored, or ordering restaurant take-out or delivery too often.
Your “latte” might be spending too much on trinkets and souvenirs during your vacations, when photographs would capture the memory.
David Bach is the New York Times bestselling author who created the phrase “don’t buy lattes.” His inspiration for this phrase was a conversation with a young woman who insisted that she didn’t have enough money to save for retirement, even though she was holding a cup of Starbucks in her hand.
Bach calculated that saving a $5 daily latte and biscotti at Starbucks would translate into saving $2,000 per year. (Technically, $5 per day, 365 days per year, is $1,825, but you can cut out a few Diet Cokes and candy bars to round up.)
If you invest $2,000 annually into a tax-deferred retirement account, Bach points out, you’ll have a decent chance of having $1 million or more upon retirement, depending on the age at which you start investing and market returns.
“The so-called small things on which we waste money every day can add up in a hurry to life-changing amounts,” he wrote in his bestselling book, The Automatic Millionaire.
The “don’t buy lattes” catchphrase has become so popular that it’s inspired a wave of public discussion, as personal finance enthusiasts debate whether we should focus on trimming the corners or chasing larger but less-certain wins.
Lattes are a metaphor for life.
It’s fitting, then, that David Bach’s final personal finance book, The Latte Factor, is written as a parable. He introduces us to a main character named Zoey Daniels, a 27-year-old New York magazine editor who believes she doesn’t earn enough to amass savings, despite her decent-but-not-spectacular income.
David joins us on today’s podcast episode to share Zoey’s story and describe how to grow wealth at any income level. He also describes the radical sabbatical that he’ll embark on next.


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Jennifer
Hey, Paula! I adore you and your podcast! I was so looking forward to listening to this episode, but had to stop about twenty minutes in because it began to feel like stream of consciousness mansplaining (sorry to use such a sexist term, guys.), rather than your normal, interesting, two-way interviews. That being said, I love David Bach’s work and have read all of his books, and will most likely get his new book from the library once it’s available. Hope this isn’t too Negative Nancy, but felt compelled to comment. I’ll be sure to also balance this out with positive comments on your other episodes because I have many, many positive things to say!! I love your work. Thank you!!
Sara
I agree with you Jennifer. I am not a huge fan of Bach and while he had some really interesting ideas I walked away with from this episode, I felt like the interview was heavy on “mansplaining” and a sales pitch.
Salome
Paula – thank you for doing the end of interview summaries! I especially loved this one because of how beautifully and eloquently you summed up the final key take away. “FIRE/FITE is not about retiring into nothingness. It’s not about withdrawal. It’s about transition into something more EPIC, more adventurous, more loving, more meaningful…FIRE is a calling that stirs your soul. It’s an inner voice that says, ‘You know what? The status quo of my life does not quite feel right, and I have the power to do something about it. THAT is the essence of FIRE.’” This is why what you do is so important because it gives a voice and life to ideas and thoughts that can ignite a FIRE, pun intended 🙂
I didn’t like using the term FIRE because of the “retire early” part. So I loved how David Bach shared the idea of FITE and that you connected the dots to transitioning to a different life. It sometimes feels like there’s pressure/guilt to continue to work because it’s not ok to not be a productive member of society. Because we always have to be doing, we can’t just be? So I love that you’re contemplating walking the talk by taking a sabbatical. I can’t wait to hear your experience on what it’s like to completely disconnect. What feelings does that stir up? And where does reflecting on it take you? Your insights could be a great help to all of us! Thanks again for all you do!
Alice
I nearly didn’t listen to this because of the author, but I’m glad I did. Great episode!
Jennifer Disla
Great episode! Definitely take the sabbatical! I really enjoyed his commentary about his grandmother’s advice!