Your Coffee Did Not Cost You Your Financial Future (Here's What Did)

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Edited By: Andrew Gonzales
Music Courtesy of: Epidemic Sound
Select Footage Courtesy of: Getty Images
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All materials in these videos are for educational purposes only and fall within the guidelines of fair use. No copyright infringement intended. This video does not provide investment or financial advice of any kind.
#finance #investing #personalfinance
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A 2022 Survey conducted by the lending club bank found that more than a third of people earning over $250,000 a year were living paycheck to paycheck, and if someone earning four to five times the national average can’t get ahead then what hope do the rest of us have?
A popular trend amongst financial influencers is to blame people’s poor personal money situations on small but repetitive purchases with the number one target being coffees.
I mean seriously, it feels like anybody that has every posted a video about how to make $100 a day in the current year with little to no experience or trade stock options for a profit seems to hate coffees as much as they hate the efficient market hypothesis.
But is that daily Starbucks actually making things like paying off debt, buying a house and saving for retirement impossible?
Well, anybody who watches my channel regularly will know that I don’t like dragging out the answers to simple questions and, also, you can read the title of a video so, no, that daily cup of joe is not doing anybody any significant financial harm.
People like to say that it will for five honestly pretty terrible reasons, and if you listen too closely to the people hating on your morning pick me up it might end up hurting your personal finances more than the Starbucks ever could.
Most market research reports suggest that roughly three quarters of people drink coffee every day.
If you are writing a book on personal finance or trying to build an audience by giving out broad general financial advice it only makes sense to go after an obvious expense that for a lot of people is there one daily luxury to help get them through the working week.
Something so simple and easy to start is a great marketing hook to capture people’s attention to either get watch time up on a video, sell a book or promote an upcoming seminar.
The attention-grabbing hook of a coffee a day costing you your financial future works especially well when it’s combined with a dubious calculation using compound interest.
A $5 coffee every day is costing you $35 a week, if you invested that for 40 years in a portfolio making 10% then in 40 years you would have almost a million dollars.
The math check out, you can do it yourself using any compound interest calculator on the internet, but it makes a lot of assumptions that are terrible and would never be made by a real financial professional.
10% is the approximate rate of return for the S&P 500 over the past 50 years, but that has been an exceptionally good run, it’s highly likely that those returns will be lower into the future.
A good financial professional looking that far ahead should include that likelihood in their projections.
Even if returns do stay the same the average investor typically makes less than half of these returns.
A study conducted by the investment research firm Dalbar Inc found that the average equity fund investor made a return of just 4.25%.
If someone is in a financial position where their $5 for their daily coffee is the only money they can save to make contributions towards their retirement savings, they are likely not going to be able to grow that account before it becomes too tempting to access to cover an unexpected expense.
The daily coffee equation also doesn’t include inflation or taxes that will both eat into this final figure considerably. Using a more realistic compounding factor of 3% giving up the daily coffee and putting it all into an equity portfolio would net you just under $140,000 after taxes, hidden or direct trading fees, inflation and realistic portfolio management.
$140,000 is still a lot of money, but it’s not going to fund anybody’s retirement, in 40 years’ time it might struggle to even make a down payment on a basic home.
So it’s to Learn How Money Works to prove that your daily coffee did not cost you your financial future and work out the things that actually did.

[@HowMoneyWorks]

Upgrade the way you learn with Brilliant! To get started for FREE go to www.brilliant.org/howmoneyworks

[@shaunmoorefinance]

This video hits the nail on the head. Coffee ain’t gonna destroy you.

[@robertsanders3794]

"These dirty financial KZbinrs only want you to sacrifice your coffee to join their program" "And now, please get started on OUR program instead" lol

[@olstar18]

@@shaunmoorefinance That isn't the point about the coffee. You are buying a cup of coffee that you could make at home for 10 cents that you could buy at a gas station for a buck at the price starbucks charges which is what 7 bucks. How many people get that cup every day. That adds up. Also where else are they spending money that they don't need to spend.

[@shaunmoorefinance]

@@olstar18 Yeah I understand completely the maths of not buying coffee. Though, a cup of coffee or 2 cups of coffee at Starbucks does not break the bank. If it does break the bank, then the issue is with your wider lifestyle or lack of earnings. They would be the issues you have to start with. Your retirement shouldn’t be resting on your decision to get a macchiato before work.

[@HunterTracks]

​@@mixmax6027You do realize that you can't disprove a study that has been replicated hundreds of times by failing to replicate it once? The supposed disproval of ego depletion has had more than a few fair criticisms levied at it.

[@soapa4279]

I had a $2 Million net worth, made over $300K a year and drove a 458 Ferrari Italia. Sadly, I started drinking coffee. My life spiraled out of control and I lost everything. My wife left me because she couldn't stand me ordering $5.75 Lattes at Starbucks anymore and we couldn't agree on 1 extra pump of espresso. My kids despise me for smelling like coffee beans and said "Father, I no longer recognize you!" My Ferrari self transformed into a Pontiac Fiero. Coffee ruined my financial future!

[@_marketingwithstephanie]

😂😂😂

[@darkpaw1522]

Lol, satire.

[@OdinsSage]

Lol, "pump of espresso"

[@zlr9022]

Gosh im so sorry that happened to you. Coffee is an evil evil thing

[@kirk2767]

Sounds like an episode of Nat Geo's "Drugs, Inc."

[@discerningfreedom4124]

I think willpower fatigue is the strongest point in this video. I think there is a balance though, where you don't force yourself to completely cut out "Starbucks", but rather tell yourself sometimes it's fine and on other days you'll make your own coffee. It's the same reason a lot of diets don't work, because once you're done with the diet you tell yourself that you "owe" yourself or "deserve" to splurge, which is basically like opening the floodgates. So, I think having a balanced approach is important.

[@emilyanne1311]

I allow myself 1 coffee / lunch / breakfast out every 2 weeks to celebrate payday

[@AwesomeHairo]

The old adage: "Everything in moderation".

[@cottoncandiez8872]

Wasn't there a hoopla proving willpower fatigue doesn't exist due to the experiment that was used?

[@discerningfreedom4124]

@@cottoncandiez8872 I'm not aware of that, but would be interested to hear a different perspective/study. All I know is that from my own experience and other's experience it seems like a real thing. IE. Keeping myself from some type of food, drink, or whatever for several weeks, months, etc and end up binging on it.

[@iCarus_A]

@@discerningfreedom4124willpower fatigue is definitely real, but there are ways to "manipulate" it so that it happens slower or in a more benign way. For instance, not having junk food easily accessible can drastically reduce junk food consumption.

[@maxbaugh9372]

When I was in grad school, I had a habit of reading books in an overpriced coffee shop, and for a while, I was stressed about it "being a waste of money". Then I compared it to rent & realized that even going there every single day was relatively insignificant, and in fact, that entire cost was eliminated by the rent change when I moved at the start of my third year. A modest fluctuation in the big-ticket items can completely dominate months of diligent frugality in the small things.

[@celloer13]

I love that statement

[@mariacruz07]

That last sentence is perfect

[@Erin-rg3dw]

Can't remember who said it, but they had the same sentiment: if you save money on the big-ticket expenses - housing, transportation, etc. - no amount of happy hours is going to ruin you. Obviously, there is still a limit to where you can cut or how much you spend elsewhere, but the point still stands.

[@pretzelstick320]

It’s as simple as tactics vs strategy

[@DamianSzajnowski]

What if you compound both though? I like brewing coffee and can have a top tier speciality drip or aeropress for around 1/10 or less price and in 10 minutes including cleanup.

[@simonbad]

I don’t know how but you’ve managed to package an unbiased analysis that is more entertaining than the sensationalized segment of economic and financial news. Thank you for your efforts to be the signal and not the noise. I understand that the economy is currently in a downturn and that we must wait for things to get better.

[@IrenaDolinsek]

As hard as it may sound you can plan for the recession. If you are working, find extra work and get an Investment advisor. Protect your deposits by having enough cash in short term fixed income. Then cut your expenses, minimal insurance, cut utilities.

[@AstaKristjan]

@@IrenaDolinsek I think the current market might give opportunities to maximize profit within a short term, but in order to execute such strategy , you must be a skilled practitioner and that's exactly why i enjoy my day to day market decisions being guided by a portfolio-coach and for over 2years+ and I've netted over $800k.

[@Erinmills98]

@@AstaKristjan Even if you have a humongous income you still need to draw up futuristic plans because anything can happen. One could lose one's job or whatever. Investment cannot be overemphasized. About your advisor, how does one reach pls?

[@AstaKristjan]

@@Erinmills98 Jennifer Puckett Hunter. She's a reputable tutor who showed me that profits can be produced in both bull and downturn markets. She talks about investing, insurance, making sure your retirement is well-funded, and searching for methods to create a volatility buffer for investment risk, among other topics.

[@sergiowinter5383]

@@IrenaDolinsek Buy guns and ammo

[@cherokeevolfusa2891]

I never took the "its the coffee" line literally. Its that plus the eating out, the impulse buys, the fancy gizmo you use once. Its what the coffee represents. People spend lots of money in tiny increments that they think doesn't matter, but when its all added up it does.

[@lpfan540]

Recently did the math a few days ago and found out that my food expense was by far my 2nd highest expense just below rent. $12 fast food + $6 coffee + $5 mid day snack comes out to $690 per month. Even if I just went with the coffee and went without the fast food and snack that's still equals out to my car insurance $180 and one month's rent after a year. Like you said it all adds up.

[@alexbernard6220]

Yea this video felt more like him trying to take down Finance Bros than anything of actual substance. Lots of conflating and cherry picked stats it seemed.

[@hannesRSA]

Just stop living. And retire with 10% more. I mean it's about that for someone like me who spends about 120% of my income (yes) on mortgages and investment.

[@geroni211]

​@@alexbernard6220one of the videos he showed, the influencer was literally recommending getting an espresso machine. Clearly he isnt using it as a a short hand for small expenses.

[@Ab3ndcgi]

Yep. I've done the math. 50% percent of income going to rent. Another rough 20% going to transport and utilities. Another 25% going towards food, and that eating homemade beans and such in order to scrap every penny. Didn't ate a steak for years. And after bringing in my own food and tea or coffee for work in order to save 20 dollars a month I am supossed to feel guilty for having a nice cup of coffee, a burguer, or a beer every once in a while when planets align? F*ck off. Your problem is that you are labelling human necessities such as housing, food and company as a luxury. All of this while placing money, work, hustling and productivity as the utmost priority. And you are supossed to just keep up with that withouth a healthy dose of drinkable stimulants? Don't make me laugh. Think instead of how much you could save if you had an actual reasonable living wage and expenses, in which housing and utilities does not add up to more than 20% of your income. Then start demanding that CEOS give away their own coffee and fancy food budget in favor of offering you reasonable prices and wages.

[@KingUnKaged]

Andrei Jikh and Graham Stephen are partially responsible for people losing millions to FTX and BlockFi. The sheer audacity of them talking about how your coffee habit is costing you your financial future is beyond my capacity to understand.

[@codymills2393]

Not to excuse them for that, because frankly, there is no excuse, but to grahams credit is the reason I have a retirement account and care about my financial future in the first place. I no longer am subscribed to him, but I am subscribed to How Money Works so you win some you lose some.🤷🏼‍♂️

[@mbank3832]

dont forget kevin oleary. his dude also partially responsible

[@Lonovavir]

I unsubscribed from them for this reason. Graham's videos in particular are too click baitey now.

[@TehEuphemism]

Grifters gonna grift, my dude

[@Pizzonia295]

@@goods1224 Graham seems a genuinely nice guy, trying his best. But his huge mistake was promoting Kevin David and never owning it.

[@L34VITT]

My response to the latte argument: "I went to school, became an engineer, worked hard, and don't live beyond my means. If I can't enjoy an overpriced coffee once a week after all that then I might as well die pennyless" 😂

[@gromm93]

Now replace that "coffee" with "a boat/expensive car/flying lessons" because as your income grows, so does your ability to spend big on really insane indulgences. That's what EE means by "lifestyle creep".

[@thelight3112]

​@@gromm93 This is true. You also have to look at it as a proportion of your income, though. $500/year on coffee when making $80k is about half a percent of your income. The same proportion on a $300k income is $1800. That is very far from boat/sports car territory.

[@thedog5k]

@@gromm93 “ do nothing but work, save, and you can die a millionaire!”

[@Broniath]

​@@gromm93 You can easily avoid this by just not being an idiot. I used to be a student and I work now, so I have like 2k more monthly to spend, but I maybe spend like 300 more or something and I just invest the rest of it into stocks.

[@MercenarySed]

An overpriced coffee everyday, not once a week. This video is full of crap. All of the top investors in the world know that fast food and coffee are costing most of us to fall behind. Please stop making excuses for bad money behavior

[@rumplstiltztinkerstein]

I love this logic. I grew up watching my parents saving costs on groceries. But when it comes to buying a car, they pay more for a better looking car because they "saved enough" and "deserve to have a better looking car". So buying something tastier in a day is bad. But paying extra for several months for a new car that does the exact same thing as the previous is ok. edit: So many replies. I don't feel I'm on the right for commenting what others do with their money. But since the discussion is about saving money, I think it is important for us to talk about it.

[@scrumtrellecent]

In addition to wanting a nice car did they put money away for a rainy day fund like roof replacement, hot water tank replacement, furnace replacement etc ? If they did, I don't personally see an issue with saving for a want.

[@tomlxyz]

​@@scrumtrellecent it doesn't seem like saving for a want but rather rationalizing an extraordinary expense.

[@mbank3832]

dont be like your parents, you are smarter than that

[@scrumtrellecent]

@@tomlxyz Exactly..IMO as long as the rationality of purchasing a luxury big ticket item or let's say vacationing first class doesn't impact a families basic needs, I say scrimp and save in every way possible.

[@sloanv2610]

Technically the logic works out. Save more now so I can spend more on a car later. Right?

[@KennethMcKrola]

10:35, "Most crucial jobs fall below (Being financially comfortable)" is the part of the video that I think is very concerning about our generation. The cost of living has far outpaced wage growth in many important jobs that we rely on as a society. If something does not change, there are going to be irreversible consequences as Gen Z enters the workforce.

[@gromm93]

If you consider what "crucial" *really* means, you quickly see that these are literally the lowest paid jobs in our economy, and the bottom has already fallen out of it. Someone working a minimum wage job stocking a grocery store can't live anywhere near that store if they rent. I live in a very unique space where I have already qualified for a mortgage in a place where I can live right next door to my job. Anyone starting out in the job I have now couldn't do that no matter what, and most of my coworkers have to spend an hour or two riding the bus to work. They can't afford to buy a car, and even if they could it would be an impossible drain on their finances or a maintenance nightmare or both. And even then, they'd still have to spend at least half an hour commuting each way. Next door? Impossible. But once you're finally in that place where you can own instead of renting, your mortgage often doesn't grow with inflation, and you can't be evicted because your landlord wants an extra $800 a month out of the next person. Good luck getting there with that low paying job though.

[@thelight3112]

​@@gromm93 and a huge part of the problem is how wages are already sky high in the US, compared to our first world peers like Germany, NL, UK, etc. The crux of the issue is that the cost of living has been allowed to grow too high. Wages can only go so high in the US before America becomes simply unable to compete globally.

[@gromm93]

@@thelight3112 "Allowed to"? What can a government do about this that does not directly manage its economy?

[@thelight3112]

@@gromm93 "Allowed to", as in failed take action to prevent it from happening. Preventive measures such as: - Cracked down on increasingly complex & expensive building codes/permits/inspections - Forced re-zoning to allow medium and high density housing (you currently can only build big single family homes in many housing-stressed areas) - Constructing public housing - Strategic subsidies to small/medium farms to prevent market consolidation Most of the increase in the cost of living has come from a shortage of housing in the areas that have lots of jobs.

[@Ijem7v]

@@thelight3112 a lot of communities infrastructure can barely support single family home neighborhoods. I don’t think you realize the infrastructure necessary to support urban high density buildings…

[@evanbarnes9984]

I feel you SO MUCH on the willpower fatigue. As a teacher, it's something I've thought about a lot. Children literally borrow the emotional regulation and willpower abilities of their teachers because they don't yet have brains that can do that on their own. This means I wind up making absolute shit tons of choices for others during the day, and lend out my ability to focus to people who can't. It really doesn't leave me with much in the tank after work for doing the work and making the choices I need to properly take care of my personal life. Fortunately I recently got a new higher paying job that isn't teaching and I'll be switching out soon, but that's just one of many reasons why we need to prioritize paying teachers more highly. It's a job that takes an extreme toll, and it just isn't properly compensated.

[@TheCarnivoreSoprano]

This.

[@rebeltheharem7028]

I actually agree with this, and think its abhorrent how low teachers are paid.

[@robobrain10000]

I just make my own coffee not because I am cheap, but because I am too lazy to go to the store and wait in line.

[@09198384558]

Same plus I can choose the beans that I like

[@daysandwords]

I do the same because it's also better. I have no idea what the person behind the counter will interpret if I say "flat white". Some people seem to think the "flat" refers to the taste of the coffee.

[@Roxor128]

Laziness is why I drink instant. I'm sure other methods taste better, but I can't be bothered and the results from instant coffee are good enough.

[@xavierclayton9990]

Ok

[@AlexisXavier]

This is the way

[@moosemcfood6335]

Long time watcher, first time commenter. This video was super refreshing to see. How Money Works (in my opinion) is always down to earth and level headed. It’s the only finance channel that I really watch anymore. Andre and Steven (in my opinion) are more the product of luck than “smart” investing. Your perspective about things always include more angles, and is always more insightful. Thanks for all the good work :)

[@HowMoneyWorks]

Thanks for the kind words and being a long-time subscriber!

[@PsyrenXY]

You should definitely also watch Patrick Boyle, Plain Bagel, Economics Explained and a few others that this channel has promoted too

[@richhornie7000]

​@@PsyrenXYthe only sane channels on this corrupt financial space

[@uromvictor]

even this channel is a product of luck...

[@cetriyasArtnComicsChannel]

I don't really do small repetitive purchases, but you know what end up happening? My sink broke, my frigerator broke, my car needs maintenance, family needs help, medical issues, at the point of it all at the end of the day a little coffee doesn't really make a difference it's all about making as much money as you can and keeping as much money as you can. And everything is infected by inflation except our pay check

[@djm2189]

Preach! Love the brutal honesty! I'm 28, earn $112k+ bonus, fully remote, 6% match. I did not allow lifestyle creap to set in. I went from 75k to 112k in 2 years. I probably live like I make 90. Bought a used car cash vs a Tesla like all my friends. I find joy in where I live, my dog, and occasional cruise/trip, buying healthier meals to make at home. As for coffee I make my own only because I HATE GOING OUT FOR COFFEE! lol.

[@djm2189]

@md-xe8uf I'm a business analyst consultant in Biotech.

[@RoflcopterLamo]

@@djm2189 Brb

[@bolt7047]

Going on cruise ships is a great use of money. To bad a lot of people don't understand how fun they are.

[@gteixeira]

112k USD a year for a full remote job is a ton of money. Consider yourself lucky. Most people won't get that much, even by working 996.

[@djm2189]

@@gteixeira now it's 117k with bonus of 3-6k🫣 pay raise. Believe me I count my blessings daily as I come from a poor background. Never would I have imagined this for my life simply since I didn't have anyone I know in this situation. Continuing the course and ensuring I stay very marketable.

[@carlomalabanan]

The best lesson from this video: don't focus so much on your daily expenses but rather focus more on how you could increase your future income streams and net worth to fund your daily expenses without worries (and that does not mean don't borrow money at all).

[@SmallSpoonBrigade]

One of the things that accountants learn is that you don't have to worry about things that aren't large enough to be material and aren't going to have an impact on the decisions that you make. If it's only a couple bucks you probably don't need to worry about it unless you're in an extremely tight financial situation or those charges add up to something significant.

[@hamsterama]

@@SmallSpoonBrigade So true! I work in auditing, and distinguishing between material and immaterial is a very important thing. I used to be really uptight about saving money. But then my job crossed over into real life, and I realized that spending a few dollars on small luxuries here or there were making zero impact on my personal finances. By far my largest expenses are related to housing. And saving a few dollars every week on snacks won't do anything to bring my housing costs down.

[@jejudo3000]

And don’t increase your lifestyle spending as you make more money

[@rookiej5587]

@@SmallSpoonBrigade yep, i was extremely frugal a while ago. My father taught me about this concept you just mentioned.

[@JackieOwl94]

I’d understand if you were spending $7-$10 on coffee or lunch every day if you could do the exact same thing at home making something you love with extra time to be at home without waiting in crowded lines. That would be a better reasoning than “don’t spend on coffee”. It’s still really important to have your daily staples but don’t go overboard on then, and being humble about it will help keep your mind at ease and keep things simple.

[@Mrs.Silversmith]

I think the big difference is that 5$ a day on a coffee for someone who is in the green and can afford it is one thing, its another if you have credit card debt or a restricted budget. Not everyone is in the same situation. The key is making mindful decisions.

[@cooledcannon]

It's almost the same principle if you are in debt because it's literally $5

[@My_name_is-]

​@@cooledcannonwell the thing is that if you get the $5 cup of coffee every day of the month, that is $150 on just a cup of coffee, which isn't gonna help anyone with a tight budget. Small things like that add up man. People don't get this because they're so busy thinking of the present and never of the future. Oh and I'm pretty sure that a cup of coffee and Starbucks is more like 7 bucks after taxes so it would actually be around $200 a month to get a cup of coffee in the morning. And let's not take into account the commute and time is going to take you to get that cup of coffee as well.

[@IM-qy7mf]

@@My_name_is- The author of this video literally proved you wrong by projecting the actual value of these small "adds up" in the future. st - hu and just admit that y'all just want an excuse to blame people for how unaffordable life is nowadays.

[@Alabenson]

As a financial planner, I see this more as a case of "influencers misapplying advice" more than anything else. I use the "daily coffee" issue as an example in too scenarios when talking with clients; either cash flow conversations, where it's an example of how even small purchases can add up over time if made on a regular basis, or savings conversations where I need to illustrate that it is possible to start saving even with only moderate effort. Trying to say coffee purchases are going to cost your financial future, on the other hand, is just unhelpful hyperbole.

[@TumblinWeeds]

On one hand I agree that that coffee won’t turn you from poor to rich, however I think the message “saving won’t make you rich so don’t even try” isn’t any better. That $5 a day won’t pay for your retirement, but it sure will come in handy when you lose your job and need an emergency fund. It’ll likely turn you from broke to scraping by in your worst hour, and maybe that’s worth the daily luxury.

[@JacobHesketh]

Totally agree, I think the message was a bit extreme.. Any small expense you can avoid and save is only going to help and compound over time 🤷🏻‍♂️

[@Jtking3000]

Agreed, I get really irked by HMW's 'contrarian to the contrarians' attitude. There are so many people who spend their entire disposable income on lots of small repetitive purchases and then complain about not having any money when something unexpected happens. More people need to think about how to prepare for the future and how to live a financially sustainable lifestyle.

[@youtubeuser1052]

Excellent point. That $5/day could make the difference between running up credit card debt at a disastrous interest rate the first time you're out of work for a month or just pulling from your savings account to cover the critical bills that you can't postpone without running up interest. If you're saving $500/month then $5/day on coffee won't make much difference, but if you're saving $0/month then $5/day will make a huge difference. A buffer of $1825/year will definitely make a difference if that's the amount you DON'T add to your credit card balance in an emergency.

[@Bradimoose]

Forgoing the coffee could make your job performance suffer and increase the likelihood of a layoff.

[@dingfeldersmurfalot4560]

@@Bradimoose No, forgoing the most expensive coffee doesn't mean you have to forego coffee altogether.

[@LAZERZ-OP]

I think the take away from the coffee topic is that a lot of people don't budget at all and spend all their money on wants instead of needs and people wonder why they're broke all of the time

[@scrumtrellecent]

The $5.00 Milkshake from the 1994 movie Pulp Fiction is the $20.00 milkshake today. Whatever people think of this video, those small daily impulse purchases really can and do add up.

[@soapa4279]

Good point, and coffee seems to be the easiest example to point out since it's common. Some people have the same habit with energy drinks. My former co-worker used to down 1-2 red bulls a day and I would be surprised he didn't die of high blood pressure for the amount he spends and drinks those terrible things.

[@ImSimplyAHuman]

I agree… But it really has become a trope. People now use the coffee argument while completely ignoring bigger systemic issues like stagnant wages and overpriced housing

[@myfriendgoo2816]

I know it's a luxury to a lot of people, but a budget trip to Europe would be an eye-opener. There they work a third less, make a third less but don't have anywhere near a third less in lving standards and are arguably better off in a lot of ways. Why? Because as a community they can CREATE BETTER OPTIONS on the big stuff like housing, higher education, health care and transportation. If a city is truly car-optional, for example, you've just saved THOUSANDS a year compared to most of the U.S., where people have to fend for themselves and have extremely high housing and health care costs as a result. Not surprisingly, the coffee business in European cities does just fine.

[@IM-qy7mf]

people are broke all the times because they don't earn enough, and they're expected to sacrifice any little joy in order to be deemed "financially savvy" by sadistic freaks who think that eating ramen every day and having a million dollar in the bank account is something to brag about.

[@Ksenia584]

I found cooking at home greatly improved my personal finances. It was a lot of little things that added up. I didn’t spend $5 on a latte, so I also didn’t spend $3 on a brownie. I didn’t spend the money on gas. I didn’t spend $3 on a brownie, so I spent $0.30 on eggs. I started making breakfast, so I started cooking other meals. Cooking at home saved me tons of money. I was at the grocery store more, so I saw when there was deals on toilet paper and paper towel. Finding ways to save became kinda fun for me. I negotiated my Internet bill in half. I canceled subscriptions I wasn’t using. In the end, I saved about $700 per month. When you start being mindful of your spending, you discover you’re bleeding money in useless stuff.

[@AshleyHankey]

How did you negotiate I usually get a not full payment if I negotiate a price that was agreed upon before?

[@aaronbono4688]

While I agree with much of what you said, my wife and I recently stopped getting those coffees and I got a coffee maker and switched over to just making my own coffee. I save time by not making trips to the coffee shop now and we're saving about $600-$800 a month which we are now putting into investments. It took a few months to make the transition but now when I do get a coffee from Starbucks it just doesn't taste as good because I adjusted my tastes over time.

[@lorescien4148]

I ain't even gonna lie... what coffees were you getting to be saving that much? I at MOST saved $200 a month after switching to coffee and tea from home. I'm starting to wonder if my area just let the coffees out here cost less since everything else is insanely expensive to begin with. Or maybe it's because over half my coffees were from Dunks before they started trying to compete with 'Bucks for pricing hikes. 😂😂😂 Either way. I'm glad you guys got a huge bonus out of the switch, especially for the taste changes. Homemade coffee is the best.

[@aaronbono4688]

@@lorescien4148 I was getting mochas with almond milk and I was up to two a day while my wife was getting a latte daily. It was all so easy to grab goody every now and then so it adds up fast. Now that I just grabbed a coffee at home I'm not so tempted to get the extra goodies either.

[@troybaxter]

I mean, Starbucks is crap coffee anyways.

[@IM-qy7mf]

This is like a millionaire saying that they started saving money when they stopped going on ski trips. While likely true, that use case is simply off topic with the use case of the average person. Similarly to you, you and your wife were spending about $30 daily on coffee. You do not represent the average person these cookie-cutter, jUst cUt oUt tHe cOFFee, thinkpieces are usually aimed at.

[@stupidbro2301]

There is famous joke in my country. Man comes to a doctor and nurse says: "Do yo know, that if yo stoped smoking you would have in 10 years money for buying a brand new Ferrari?" Man: "And you, do you smoke?" Nurse: "Of course, not" Man: "Where is your Ferrari?" Small expenses always add up, no matter you do. People are rich, because they make lot of money, not because they are saving (this is a biggest lie in finfluencer world). If morning coffe increase your mood and increase a chance of promotion in job, just drink it.

[@cbyrne08]

But if you drink 2 coffees a day you'll definitely never retire.

[@HowMoneyWorks]

LOL

[@imonyahoo87]

What happens when it's 4 a day? I need to call down or may need another dose of caffeine

[@Jr2728]

​@@imonyahoo87 4 a day is not bad my sister has 10 a day

[@Lonovavir]

That's why I drink one cup of coffee and one cup of tea *Long way to Tipperary plays*

[@rainacherienne1010]

@@imonyahoo87Your grandkids will still be paying your coffee debts.

[@rehbeinator]

I see the "save the money you would have spent on coffee" argument more as an abstract principle rather than as an effective end goal in and of itself. Coffee is ubiquitous enough that (for most people, at least) it represents a good first step toward resisting the temptation of the hedonic treadmill. The core principle is about training yourself to give up some luxuries in order to cut out unnecessary expenses, and that exact same principle can be applied to avocado toast, luxury cars, fancy suits, expensive restaurants, or any other luxury expense. If you can't even bring yourself to give up something as simple as coffee, then you're very likely to get stuck in that hedonic treadmill mentality for larger luxury expenses as well. In other words: it's less about the amount of money actually spent on the coffee, and more about nurturing a mindset of frugality.

[@mickwayne3398]

coffee isnt simple.. once youre hooked on coffee its no longer a luxury its a necessity.. if i try to skip a day i want to jump into traffic from the headaches by 5pm

[@tymondabrowski12]

@@mickwayne3398 try to buy instant coffee and possibly a milk frother, it's very cheap and will give you the caffeine. Might taste worse than you're used to but later you can start exploring better options like proper brewing at home.

[@youtubename7819]

Right, but the point of the video is that frugality cannot rescue a low income. It could generations ago, but for this generation you can’t retire, buy a home, or even purchase a car out right thanks to frugality. You have to raise your income. (And yes, not blow your entire new income. But first you have to get the higher income.)

[@lotoex]

@@youtubename7819 I feel the point of the video is wrong. The median income in 2022 in the U.S. was $54K. I have never made $30K+. I am a millennial. I bought a house. I paid off my house. I contribute to my 401K and have a brokerage account. I could retire early. I don't live in California or New York. I think a point he makes in the video about to earn a higher salary you have to live in a HCOL is very true. However you might as well take that to it's extreme. Is it worth it to make 120 million a year if you HAVE to rent a place that costs 12 million a month?

[@youtubename7819]

@@lotoex congrats on your house, but obviously not everyone can enjoy your situation. If everyone moved to your area to get in on the cheap housing you are enjoying, the price of houses would go up. And there would be no jobs around to pay all those people flocking to your area. So we must consider the overall economic situation, not the somewhat rare anecdotes of people doing ok in less populous areas. Millennials are scarily behind retirement savings and nowhere near the home ownership levels they historically should be at by this age. Wages have not kept up with inflation or corporate profits, and that was before the whole pandemic fallout and war fiasco.

[@fahimzahir9587]

When the content of the advice rings hollow its a good indicator that the finfluencers have little to say because the real problem lies outside the bounds of comfortable discussion. So instead they blame coffee instead of greed, wars, economic pressures and lost opportunities. There is a point where self accountability can only take one so far before external factors shit on our desks.

[@donaldlyons17]

Right but how much can they say if the admit there were external factors that impacted their own outcomes? There is just so much to talk about when it comes to individual behaviors and not much to say about everything else.

[@thefocuschic3234]

Your honesty is always refreshing. Depressive, but refreshing [sips homemade coffee]

[@BTrain-is8ch]

Seems more like the defeatist cynicism that sells online these days when talking about money. The video literally starts with the implication that you're too dumb and undisciplined to continuously invest in a low cost index fund without messing with it and continues to say if people making a quarter of a million dollars a year can't get it right surely you can't either... That's not honesty. It's someone that already gave up and wants to drag other people down too.

[@James_36]

honesty? he first claimed 50 years of stock returns will be lower... that is a lie, he does not know that and has no viable evidence to support it. Secondly he claimed buying $35 a week coffee everyday wont put a dent in your finances, yes it will. You need a course on how to spot honesty

[@luisoncpp]

I think he is overly pesimistic, at least my experience have proven me that: 1. It is possible to get off of the hedonic treadmill and live frugaly. 2. It is possible to have an exciting job that it's also well paid. 3. It is possible to not time time market. He seems to assume that just because most people do very common dumb things, you have to do them as well. Btw, did you notice that he assumed a market return of more than 10% when he claimed that the College Degree was not that good as an investment?

[@bigslacker666]

I agree with the idea of tackling the issue from a strategic standpoint rather than tactical, making more money and being frugal are not mutually exclusive. And being frugal doesn't have to cause willpower fatigue. Using the coffee example, why would I wake up all bleary eyed, shower, dress, go out and buy a sub-par $7 sbux coffee when I can wake up and first thing and fresh grind really good quality beans for a better tasting and cheaper morning cup and get it sooner? I also agree that $250k doesn't necessarily make you rich in the popular sense, like ferraris and private jets, but I'd say it does let you live at a level above what I'd call just comfortable unless you're starting from scratch and in the most HCOL areas in the nation. This is played up in the vid, but the 66% (we'll throw out the 1%ers) who aren't paycheck to paycheck are doing very well. $10-$15k/month TAKE HOME BASE SALARY plus bonus, plus RSUs isn't impossible to blow through but you gotta make some pretty bad mistakes and then keep doing them over time. :D

[@lotoex]

I work at Subway and this guy would come in every day and get 2 six inch breakfast sandwiches for over 10 years. The total was $10.70 at the time. Working out the price of a 4 year old Ferrari at the time he started (at least to my knowledge) and assuming he had a 600+ credit score; He did in fact spend more on me making him a breakfast sandwich than the price of a slightly used Ferrari.

[@jonathanshaffer6757]

While I do agree with the sentiment that a small amount of wasteful spending won’t ruin your financial future, it is logical that it’s when the purchasing is about more than just coffee like a dozen subscriptions, expensive car payments, higher than needed rent, eating out at fancy restaurants frequently, then these seemingly small purchases do really add up quick. You can easily spend a thousand or two a week on pointless or wasteful expenses.

[@glenbert1396]

I just bought more stocks few minutes ago. Tying up money due to an apocalyptic stock market crash is also not a smart move. Life is a risk and it's better to take risks than to do nothing, you can't always expect to make huge profits all the time, people have so many opinions about a recession/depression. In just 5 months my portfolio grew by $300k in gross profit, the main thing is to diversify your portfolio and you will see amazing results by investing smartly.

[@gagnepaingilly]

These are surely desperate times, but in my opinion, there is no market condition that a good financial advis0r cannot navigate, especially those that have existed since the crisis of 2008 and before.

[@smithmurphy]

I agree, I was on the sideline for awhile observing, trying to figure out the best time to get in, that was before I came by a CFP, commended by a pundit on Reddit, reluctant at first but I went ahead and got in touch with the CFP, long story short, it's been 3years and counting and I've made over 1.5million dollars simply by following her guidance. I took a vacation to Bahamas this summer just to reward myself a little for the consistency lol. GREAT SUCCESS!!!!!

[@shirleneunglesbee1423]

@@smithmurphy Mind if I ask you to recommend how to reach this particular CFP you using their service? Seems you've figured it all out unlike the rest of us.

[@smithmurphy]

@@shirleneunglesbee1423 "Jill Marie Carroll" is her name. I initially came across her on a CNBC report then on an investmeent newsletter and at once searched her on the internet, best decision I've made to stay afloat these crazy times. She has been exemplary.

[@shirleneunglesbee1423]

@@smithmurphy This is good info, curiously copied her full name and pasted on my browser, her site came up at once, and her qualifications is topnotch, thanks for sharing.

[@daysandwords]

Yep, great video. You mentioned it a bit with the will power thing but the other side of that coin is that if you're smart, you can use small and relatively inexpensive things like coffees to leverage massive development gains, e.g. I generally require myself to work for 2 hours every morning before I go and make my coffee (I make my own but whatever, it works out about the same anyway) - and looking forward to that first break generally makes me extremely productive for 2 hours. 2 hours of solid work is worth 15-20x as much as the cost of even an expensive coffee.

[@locobob]

I always took the Coffe and avocado on toast takes as referring more to the mindset than the actual purchase. Like, if you’re broke, in debt and you are still willing to put a daily Starbucks on your credit card, something is definitely wrong with your priorities.

[@notgrubu2179]

Some people who are in debt not only buy avocado toast but also netflix, hbo, disney, spotify, new iphone. They should buy a house and get rid of rents first. They need to put at least 6 months of expenses aside for bad days.

[@ImSimplyAHuman]

@@notgrubu2179 your statement is totally reasonable… But not practical for most people. It’s very hard to make enough money to afford overpriced housing these days (to qualify for a loan) … people are stuck renting and it leaves hardly any money left to save it for a down payment. Partly due to stagnant wages and commodified housing. Not to mention the fact that so many people have had to work in the gig economy or become self-employed in order to make a living - which makes it extremely difficult (if not impossible) to qualify for a home loan. Especially one large enough to accommodate for over priced housing.

[@YobYm2]

Just for a little bit of hope on that $50,000/year quip… when I started working my current job I was right at that mark living alone in a 1 bedroom apartment. I was successfully putting away ~$1,300/month into savings. The trick? Living in a low cost of living area and just spending a little extra time on the front end researching the big expenses (namely apartments cause that’s by far the biggest expense). That makes a MUCH bigger difference than penny pinching on the small discretionary purchases. You can be financially stable on 50k even today as long as you are willing to live in a less flashy apartment and drive an older car. It’s at least partially a lifestyle choice. Helps that most of the things I like to do involve outdoor recreation which is usually cheaper than concerts etc but I go to the bars quite a bit still… since it’s a lower cost of living area, going out is cheaper too

[@soapa4279]

Should also mention depends what state you live, but $50K a year anywhere is still pretty decent for single folks.

[@dingfeldersmurfalot4560]

@@soapa4279 Very much depends on where you live. Getting any significant savings or investments put aside on $50k/yr is hard in the bigger/more expensive cities.

[@soapa4279]

@@dingfeldersmurfalot4560 Yeah exactly. Even goes to what county you live in each state. $50K in California, maybe in a tier 2/3 area (central valley etc.) is pretty good. But in San Francisco, Santa Clara, or Dublin, it's almost poverty level.

[@aleksapavlovic2542]

What should I do, I make $34,000/year as a mid level software engineer, in fucking Serbia, this way I will never reach $100,000/year let alone $250,000/year or more, what should I do?

[@soapa4279]

@@aleksapavlovic2542 Not sure other than try to get work in another country. US mid level software engineers here in California make $150-$200K pretty easily.

[@RamenEnjoyer404]

I've been a huge fan of your videos, and I really have enjoyed how you have been taking your own stance versus just copying the previous money KZbin. The points you made in this video are 100% valid and true, but I think you missed the point of the whole coffee a day invested concept. It's not so much about the coffee, but trying to change the way a person views money. Your right that saving all your coffee money would never be enough, but it's not about that. It's about creating a first step to a better financial future that is easy to start, but can also show just how much money that can bee gained if we can cut out things that cost us money that we don't "really" need. There are definitely content creators who legit are saying coffee is making you poor, but the coffee idea is about the concept of finding ways to save money for someone who may have never saved money in their life

[@ShewedDude]

Its not usually just coffee being purchased though… It turns into snacks and breakfast that rack up to $10+ a day just for breakfast alone.. Now imagine not packing lunch everyday.. My coworkers do this everyday and it cost them A LOT. Not to mention the weekend kick it..

[@ShannaFarley]

It's about balance. I treat myself to one fancy coffee a week. The fact it's not an everyday expense makes it more precious and enjoyable. As for lunch. I primarily bring mine and will occasionally eat out with coworkers. Sure it's $10, but those lunches allow you to build connections, which can pay off down the road.

[@ShewedDude]

@@ShannaFarley Exactly. Spot on.

[@musthaf9]

I guess the main takeaway is that 3-5 bucks a day, if invested can become a lot of money, but it doesn't have to be taken from coffee money

[@Zxv975]

That's not the takeaway at all, in fact it's the exact opposite of that. The takeaway is spelled out plain and simple at 10:00. If you want to be financially successful, you should be spending your time and effort on your situation (through upskilling, moving etc) to earn more, not limit minor things which are giving you the strength to get through the day. Thinking that $3-5/day is enough to change your financial situation will fatigue, distract and placate you away from making actually impactful financial decisions.

[@rayden54]

@@Zxv975 To me the takeaway is that unless you're "willing" to switch careers (as if just wanting a better job could make them give it to you), "willing" to go back to school (as if you could actually afford it) or willing move don't bother. Buy your coffee, you're screwed either way.

[@zerodegreescelsius]

​@@Zxv975 yes 😎

[@James_36]

@@Zxv975 if everyone did that inflation would hit the roof, the very premise of why people are struggling to keep up with cost of living. Not everyone can upskill, top job will always remain a minority. so yes, looking at everyday bad habits like buying coffee everyday is sound advice

[@Zxv975]

@@James_36 buying a coffee isn't a bad purchase. A coffee will never be the difference that separates you from financial freedom and being broke. I'm just repeating stuff that was covered directly in the video already, did literally nobody watch it? Anyway, the root of the cause is Capitalism, not individualism. The whole narrative of blaming people's poverty on their own personal choices and not on the obvious, systemic problems of a broken system is propaganda created by capitalism to stop people from questioning the system. Remember the quote: "When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist."

[@seanshomeshop325]

I stopped going to starbucks and make coffee at home, i went from being out the door in 15 minutes to taking an hour and a half to leave slowly, this also came with a career change, but buying coffee and drinking it on the commute does save some time.

[@Pippy1]

So why not make it at home and still drink it on the road..?

[@seanshomeshop325]

@@Pippy1 well now my round trip commute is 30 minutes and not 2-4 hours and i hit no traffic, i did do that for a bit, it still slowed me down in the morning, but it made it harder for overtime

[@jenweatherwax7113]

This definitely assuaged my guilt over getting Starbucks, I appreciate it. I do like Graham Steve for his advice about investing in retirement and encouraging healthy financial habits, but I agree that we all need to have some small luxuries that we love or we just burn out and make bad choices.

[@ricseeds4835]

I came across a reddit thread where people were confessing spending around $500 a month at Starbucks. That is not an insignificant monthly expense but the daily amount ($16) seems like nothing

[@inihilisme1511]

There are ways to get that dopamine without spending tho, that's what people with identities have. Also, instead of spending online, you get the same dopamine from putting it in the cart for later, then forget about it while getting the dopamine. Sport is a healthier way to get your daily dopamine and can lead to a better life, even a job. But for some reason, the "luxury" end at Starbucks and not healthy small luxuries...

[@abhishekkulkarni2918]

I live in India... Coffee here costs 15rs or 12¢. While I don't spend a lot on coffee. I do spend on heath. Like gym and running ( I am a marathon runner). It costs me economically... But i benefit from it indirectly... Since I have more stamina now.... I get less tired and can actually get more done.... Because running boosts confidence and mood. Which gets appraisals and bigger projects and hence earning more money.

[@eaparks8]

You adjusted 140k to inflation so yes it will definitely make a down payment on a house in most markets (unless you live in some of the most expensive areas, but even then, it isn’t far off)

[@lotoex]

It was kind of sneaky the way he said that. I also wonder if he adjusted the contributions every year as the price of coffee would go up each year? Do you think the 140K is taking that into account as well?

[@twerkingfish4029]

I make coffee at home because: 1)the sugary beverages you can only get at chain coffee places were giving me health problems. 2)if I’m going to have black coffee I might as well make it at home because it’s cheaper and more convenient. There’s nothing wrong with wanting to spend less money, but it’s worth asking why, and if spending less actually helps.

[@AlexsGoogleAccount]

I use sugar-free creamers and sugar-free flavoring syrups for my coffee at home and I can mix it at ratios that I like, so it tastes better anyway. I've also been mixing ratios of caffeinated and decaf coffee to try to wean myself off caffeine which is something I can do when I make it myself. And I estimate that I spend about 3.50/week for coffee, creamer, flavorings every day, so that's less than $15 per month.

[@abigailf857]

I think this kind of misses the problem that this financial advice is meant to solve. Living paycheck to paycheck is a much worse situation than “not being able to make major purchases”. Yes, the economy is harder, and we can’t afford some of the same luxuries as older generations. However, we also have many luxuries precious generations did not have, and it is certainly true that consumerism is a huge issue that sinks many people’s financial future. Fast food and fancy coffee is part of that. The fact that people rely so much on these rather insignificant purchases to feel better is actually extremely concerning, it’s like we’re all addicted to the consumer culture lol

[@MiroslawHorbal]

The things you say at the end of the video hit hard. There's people I know in the UK who work as doctors, surgeons, and other specialists for the NHS and they earn less than a mid-level developer in tech. Don't get me wrong, I think software engineering is a valuable skill that should be rewarded, but the fact that it's rewarded more than the medical professionals I mentioned, and sometimes is arguably delivering less value to a society (eg, they work on a mobile app with predatory monetisation), it seems like we have our values as a society need to be re-evaluated.

[@component9008]

I mean with all of these layoffs and tech growth slowing down the reevaluation might be now, although not in a good way

[@giangle9234]

@@component9008 That's a trap that I see a lot of discussion on pay disparity between workers fall into. Teachers in the US barely make any money for their value in society, but the answer isn't to decrease software developers' salaries until it matches teachers'. Rather it's to increase teacher's salaries.

[@themachine300]

I’m in healthcare. I kind of see my job as a large cap value company like Berkshire. Slow and steady with reliable cash flow. Tech is more boom and bust like their companion stocks

[@rexx9496]

You could say the same about pro athletes.

[@minusCEE]

The things about software is it theoretically has infinite scale. You make it once and can use it until the universe disappears. Tho you need to maintain and add new features, but it adds up layers by layers

[@jesse113553]

I think it’s more like a practice of being mindful about spending and saving money. Rather than taking it literally about stopping buying coffees (or, if you’re from Australia, smashed avocados on toasts 😂)

[@skyrelaxation]

i think you should probably make a video on those young 20 something years old millionaire youtubers too, they been popping up for the past 2 years, selling courses on dropshipping and social media agency , and lots of teen boys are looking up to them, hoping they will become them one day

[@Lonovavir]

This is a good idea, I know teens who still look up to Andrew Tate as a finance guru.

[@tomlxyz]

Doesn't he already cover that by his videos on 9 to 5 jobs?

[@KTSpeedruns]

He did something kind of similar. It was something like The Problem with Financial Gurus.

[@franciscodanconia4324]

3% is not a reasonable return to use. You just said the suggestion was to put the coffee money in a broad market index, not say trade with it. Which is also what most of these gurus include In their suggestion. The average return for the S&P since 1928 is 10%. So you could reasonably assume a 6-8% conservative return over your particular 40 year time period.

[@jacobmackenzie4836]

I live in London, one of the most expensive cities in the world, and can categorically say that earning £200k/year here means you're rich. You may not be able to compete with the billionaires living in Hyde Park, but you can absolutely get a beautiful house in Islington or South Kensington and live it up at West End shows, with Michelin star restaurants. I don't know what you guys are smoking in America to think that $250k/yr isn't rich lol. (For reference, I own a house in West London, and can easily go out for nice meals, go on several holidays a year etc on a household income of

[@SymonSays]

My issue is you said hedonic adaptation as inevitable. It's not. The point about coffee, isn't specifically the coffee. It's the mindfulness about how you spend your money. The finfluencers (love this term by the way) almost always mention preventing lifestyle creep as well. A good number of millionaires are regular people working regular jobs, living below their means, and diligently saving and investing. Yes, it takes many years, but it's not inevitable that someone will end up old and broke.

[@saiyjin98]

Living below your means is the ONLY way to financial freedom.

[@David95111]

Coffee is an easy target, but the point is valid. Those small expenditures do add up, because it usually doesn’t stop with coffee and is part of a wider set of convenience habits, such as ordering take out a couple times a week. Also to keep things fair, when you’re adjusting returns for inflation, you should adjust the cost of coffee for inflation too, and then you end up significantly more than 140k. Even so, 140k for just coffee (while you could’ve paid 10-20 times less by making it at home), isn’t something to think too lightly about. You can’t retire on it, but you might be able to put your kid through college, go traveling, scale back on work earlier, or even afford necessary health care (if you live in the US). It’s an opportunity cost, and therefore I think the point is valid; however I do agree it alone is unlikely to make or break you

[@Josh-ge1cr]

I make a 130k and live in a medium cost area. After taxes, 401k, roth, HSA, insurance, bills, student debt, personal wants, entertainment, food, etc. It really isn't all that much. I am blessed and fortunate, but I know I am no where near luxury and still have to save like I did when I was making 25k/yr for luxurious things.

[@BOSSDONMAN]

Hyperinflation is destroying everyone outside of the top 1%.

[@Rhino11111111]

Bro you just said personal wants and entertainment that’s why there is not much left. Most people don’t even have the money to do those things. Saying 130k isn’t enough is ridiculous your doing fine.

[@phosferrax]

@@Rhino11111111 at no point did he say 130k isn’t enough. He just said it’s not what it used to because the cost of living of is so high. Entertainment and personal wants are very general and you don’t know what he spends on those. What is he meant to do with his spare time? Stare at a wall? You just made loads of assumptions because you saw 130k and stopped reading after that.

[@luisoncpp]

I don't think aiming for luxury is really worth it, I would prefer to aim for well being first, then convenience, and then financial independence.

[@Josh-ge1cr]

@@Rhino11111111 I would be surprised if you did NOT have any personal wants. This can be as small as coffee as the video described to something much larger like a new car. After all taxes, retirement contributions, and bills, personally, I am left with a bit of play money, but it's nothing luxurious as people may first think. When I was making 25k/yr, I had less bills because I was living with my parents (I had no money to move out). Since then, my income has essentially 5x'd, but I have since then moved out and live modestly. I thought that making low 6 figures means I made it, but now that I'm making it, it's really not much and I don't even have kids yet. This is why I know I am fortunate because there are people surviving on much less. Some people may think living = just surviving, but for me, I want to enjoy the finer things in life before I pass away such as nice restaurants, dates, flights, hotels, living area, etc. Personally, I don't want to just barely survive, I want to thrive, and it's sad (for me personally) I cannot do so on my salary.

[@adeolaola4516]

Great video. One thing I hate about financial advice is how so many finance gurus speak from a place of privilege and love to talk down and lecture people, shaming people into some minimalist lifestyle. Some people need that $5 Starbucks to keep from collapsing from exhaustion after 8-12 hour shifts. Or that $1000 holiday to decompress after a long year. Sure, one could save the most money by living in a cardboard box and eating only Ramen noodles all day, but it turns out people don't just want to hoard money until some unspecified future date. They want to enjoy the time they have while they're still alive and enjoy some basic comforts. Of course it is easier to cast sanctimonious blame on ordinary people while ignoring broader systemic problems.

[@tr3333y]

Re-stating the obvious here - this video is spot on. The "internet finance gurus" may be pointing to the right direction that people need to be more aware about their spending habits and manage their finances better. But most, if not all, don't really have any good solution and rather just throw out catchy headlines like "quit coffee to be a millionaire" to promote their content - which in turn end up enriching only themselves. It's a bit like "internet health gurus" saying things like you need to take better care of your health (which is right) - but then put out a video titled "why you need to drink apple cider vinegar at 4:55 AM everyday" - which hasn't been proven to provide any health benefits but is an interesting headline that will potentially generate clicks. As the video above pointed out - many of the financial problems are personal and it's up to the individual to fix them - but many are institutional and can't be fixed by merely changing personal spending habbits. And I strongly suspect that the content creators themselves has stopped drinking coffee or have ever met a millionaire who got rich by just cutting out coffee.

[@donaldlyons17]

Yeah your right on in my option. I am not sure many even want to be rich but they likely don't want to end up poor either. To me the issue is how to make enough to have options.

[@TumblinWeeds]

I think the $5 coffee idea is more of a “watch your small expenses”. Once you notice your coffee, you may also notice the $15 takeout, the $7 Uber and the $3 bottled water that you barely counted into your expenses. You may say, it’s obscene that we need to watch everyday expenses like food and transportation, and you may be right, but those $900 per month of single use nonessential expenses may lead to piling up credit card debt and an emergency fund that never gets saved. And no matter how fucked up the world is, before people rally up to change it, you can only change yourself.

[@humpteedumptee8629]

I think he's acknowledging this. but simply saying if we were not 40 years deep into 2.5% inflation and wage stagnation it wouldn't matter. and people need to adjust to the new economic situation. which is your either living in abundance +80-120k (depending on zip code), or never going to have it anyway -50-80k. essentially the American dream of making 45-75k a year and living comfortable is gone. and most jobs pay 30-50k so by default most people are simply screwed and if drinking coffee keeps you from losing your shit than just do it. when you have 10k at best a year not going directly to bills spending (80% of the pop). $1500 a year in small divisible happiness tokens for sanity is a sacrifice many will take. similar to some broke people spending 2k a year to enjoy a blunt each evening after work. obviously they wont die without it. but even slaves were given a bbq and some beer on Sundays. no one is going to work day in and out with nothing to show for it and keep showing up. without some little bone being thrown at them.

[@imonbanerjee2997]

@@humpteedumptee8629 did you sit on a wall?

[@humpteedumptee8629]

@@imonbanerjee2997 idk even know what your asking.

[@heroicexecutive2025]

You got it! Needing to pay off the student loans that got them that high income salary is just a complicated way to end up in the same place as a median wage earner.

[@myfriendgoo2816]

The "mortgage without the house."

[@joe97nsx]

It matters more when you're young and poor, not so much when you're older and making more. But it's pretty hard to take that advice from Graham Stephan when he's trying to sell you his own brand of coffee.

[@krustyhappyclown]

His coffee is 20 cents

[@KeithAdam]

The contrarian voice of reason in the KZbin finance space. Love this channel

[@longwoodcurrencytrading]

In my opinion, coffee does cost you your financial future - well, for those within 1, maybe 2, standard deviations of the mean income, not the poor and not the rich. It's not about the coffee, though. It's about all the other mistakes - like buying coffee everyday - that added up together create catastrophic damage of living a life of scrambling from pay check to pay check. I agree with your view that everyone out there hypes on not buying coffee every day as the "solution"; that's like saying "An apple a day keeps the doctor away" type of useless crap: Limited views of real life produce limited advice. And limited advice is as potentially destructive as bad advice. In my opinion....

[@ashishpatel350]

All the people saying not to drink coffee to save money are the same ones telling you to dump your life savings into ftx 🤣

[@asimmons6936]

Have experienced this epiphany personally. Was stuck in an underwater mortgage that was originally written for 4 incomes. One person died. Penny pinching helped but building wealth was not possible, we were just surviving. Second person got laid off and couldn’t find work and that was it. We moved to a rental that was half the cost. My finances did a 180 so fast it scared me. All the no coffees and limited everything for years couldn’t do what cheaper housing did in a single year and I realized that you need to manage the big expenses if you want to really see some change. So yeah, enjoy your coffee and contemplate any big changes you can make while drinking it. My $0.02

[@aubreejobizzarro1208]

Your point about having to live in expensive cities to access those higher paying jobs is SPOT ON. I recently moved to a wealthier city and had to start paying a monthly parking expense. A car is necessary to have access to healthcare/veterinary care and grocery shopping. I never had to pay for parking before. Now I have an additional bill on top of insurance. However, because the car isn’t used to commute to work, gas expenses are way down. It’s hard because you have to look at the cost of living versus the salary you’ll make, on top of any student loan debt you have. It’s really hard to juggle these expenses when you are weighting cost Vs benefit analysis. Sometimes it is worth the debt, sometimes it isn’t. It’s a hard thing to analyze.

[@heikodatchi3715]

🤣 that was depressing 🤣 However as an accountant, good financial management from the start of your working life (even as a teenager) WILL make a massive difference over your life even if you are on 50k. Your decisions are limited by the amount of money (which is just a tool) you have. Yes you need Evan a small amount of luxury in you life and if that is a coffee then that is is but it might have to be just one coffee a week. Up skilling, side gig or making yourself super valuable at work is a great way to boost your invome

[@5353Jumper]

They often say this "advice" to people who cannot actually even afford a coffee every day. Or forget that a Latte is filling and for many people is a meal substitute. They either spend the money on a coffee or a hamburger or a salad. Either way it is spent on calories to survive. If we look at Maslow's hierarchy, something like a fancy coffee satisfies more than one important need on the chart. Same with just about any other food based entertainment. Who are you having the coffee with? Did you flirt with the barista? Was this relaxing while you were stressed looking for a better job situation? Does it temporarily distract you from depression? Was it the only reason you left the house today and got a bit of a walk in? There are so many more needs a fancy coffee could be satisfying.

[@timothyhorton8445]

That blunt truth at 11:38 made me laugh out loud.

[@DonovanRussell-x9r]

It isn’t about the coffee. It is about the mindset. Starbucks, eating out, etc. The idea is about buying convenience and the substantial mark up that it comes with. For example, I make food for my self for only $40 a week by buying in bulk and making the food myself. If I bought a sandwich from the shop next to me and ate the exact same then my food bill would be $84 a week if I ate 2 times a day for $6 a sandwich.

[@zaboe911]

Great to know! I'll have to tell my boss that expenses, and thus profit, don't actually matter any more and that I need some time off from making too much coffee at home, since my willpower is so drained 🤣.

[@beachboardfan9544]

Ahhh yes, coffee and guac! The things keeping people poor, not the lack of raises that out pace inflation or anything logical like that...

[@travisd8374]

I'm fairly new to all of this, but 3% return seems too conservative for passively managed accounts. I haven't seen anyone use anything lower than 5% and most are calling 6-7% a safe assumption after inflation. Why did you use that rate? Also, considering that most people today aren't retiring with even $140k, I don't think its worth just shrugging off as something to help with retirement. I agree that we shouldn't remove all simple pleasures from our budget, but if you're paying $5 a day for coffee you can make at home for $0.5, it might be worth it to someone to cut back to buying coffee out less often at least.

[@jennifertarin4707]

I'll never be able to afford to retire, so I'll keep getting my daily coffee. Thank you. I budget for my coffee with every paycheck and if i buy too much and there isnt any money left on my card, i go without. My daily coffee is one of the few good things in my life

[@Fehr270]

$250K isn’t rich? That’s rich! BTW I stopped buying coffee unless I’m on vacation because it was just tossing away money and I wasn’t really enjoying it. If you are going to splurge save it for something you’ll appreciate.

[@creepersonspeed5490]

It's rich *in some places*

[@KattNat]

Very true. Getting my $3 coffee in the am is the one little thing I look forward to after waking up at 5 am, commuting 2.5 hours and working 8.5. Worth every penny.

[@JuliaMarieH]

I get coffee to treat myself on mornings when I’m not feeling good. Listen, it’s better than calling in sick or treating myself with a 4x more expensive dinner after work!

[@MrLeft11]

The reason I personally think that it's a good practice is because it starts you thinking about how you spend your money. For me, I started with a lot of small expenses and now have a lot better discipline and understanding of money, and it all started from the small sacrifice.

[@darianbarber3763]

It's not saying don't ever drink coffee, it's that 5-6$ per order is excessive and adds up fast. 1 coffee a day at 5$ adds up to 1850$ a year. They are saying making it yourself is a LOT cheaper. 10$ for a bag of coffee, 6$ for creamer, and 10-20 cups later your spending very little to diy it. Hell I homebrew Iced coffee.

[@benedictt.1050]

Influencers that constantly harp on about a daily latte are so fixated on money, they don't realize the other valuable things about the interaction. Especially if you have local spot where you're a regular, the whole experience can dramtically improve your day. From the baristas that make your drink, to the other regulars you chat with. Go enjoy your coffee!

[@kyletrusler4565]

Two main criticisms I have revolve around leaning on the "living paycheck to paycheck" survey as an example of the high cost of living. Not only is this a survey, which if you've ever read a financial post in reddit, you can have a multi million dollar portfolio and still be living paycheck to paycheck, in their own opinion, so not a real useful metric. Second, in that table, only 1/3 of those 2/3 over 250k, or 10% state they're paycheck to paycheck with difficulty, the remainder is commented as "comfortable". This stays quite stable for incomes above 100k, but for sub 100k, it goes to 18% and 36% for sub 50k. This really shows it's more of a lifestyle choice in living paycheck to paycheck, than a result of insufficient income for where they live. Point being, conflating lifestyle choices, such as buying a larger house than needed, luxury goods, or vacations, doesn't support the argument that's being made in this video. I see this argument far too often in financial videos while glossing over the individual choices people do have in their day to day expenses. Anyways, rant over

[@saiyjin98]

I constantly see arguments about how minimum wage can't afford a 1 bed 1 bath place, but I always thought that choosing to live alone was a luxury. If you choose to live with a few roommates instead, you wouldn't be living paycheck to paycheck anymore.

[@SmallSpoonBrigade]

The vast majority of people that are living "paycheck to paycheck" are doing so because of poor money management. If you've got the money to pay all the bills with any left over at the end of the month, it's a failure to manage the money you've got. That's not to say that it should be OK for businesses to pay as poorly as they do or that it's easy for individuals who have barely anything left over at the end of the month to break out of it, but it is possible with time and effort.

[@Wanted797]

I think it’s more about “thinking about it”. When saving to buy my house my wife and I were pretty hard on saving. We didn’t waste on much. I hear people and feel super old when people say they can’t afford a house but drop $700 on table top wargaming figs…

[@kevinharmon8885]

He who dies with the most toys wins

[@markbenevento6020]

Sponsored by Starbucks

[@bonnie_scott]

I work a pretty low wage job as a hotel front desk agent in Seattle. However, this job comes with two major fringe benefits- free espresso drinks when I'm there in the morning, and free drinks from the bartender after my shift if they're still open. In exchange, I cover for the baristas when they need a lunch break, and I help bus and clean tables in the dining area before I clock out. Putting in this extra work makes me feel less bad asking the cooks for a free meal now and then, they appreciate the effort. This helps me earn overtime and cuts down significantly on discretionary coffee, food, and alcohol spending. With my partner splitting rent costs, and no pets or kids, it's actually pretty doable and I'm still able to save and invest a little bit each month. Fringe benefits, people! Find them and exploit them!

[@institches2750]

The argument basically boils down to, "People can't even live on $50-100K anymore. Coffee doesn't make a difference, so you might as well do nothing because it's impossible." Which is nonsense spouted by trust fund babies. I make 20K a year working part time, and I bought my home two years ago at the height of prices in my area. I waited tables that year, and was surrounded by this mindset. You DON'T actually have to buy expensive clothes and go to expensive clubs just because your coworkers are doing it. Your high-paying job isn't worth it if your take home pay is low due to "business" expenses. It's not JUST coffee. It's 1-2 energy drinks a day from gas stations, $80 manicures to "treat yoself," ordering delivery TO THE RESTAURANT YOU WORK AT, buying a new car with a $500 montly payment because it comes with free oil changes. It's a complete lack of understanding or perspective of what is a necessity and what is an indulgence.

[@dickygouw]

My father told me about money before he passed away he said " don't thinking too much about small expenses it will drive you crazy but think how can i increase my income "

[@andreasacchi4509]

Mmmh I'm Italian and here a coffee just cost 1$ ...so I guess I won't become millionaire even without my morning coffee 😂

[@SmallSpoonBrigade]

It's not supposed to be taken literally. The whole point of that is to highlight the decision to spend money on the present versus the future for things that can easily be avoided.

[@FangerZero]

I love your videos, though I don't drink coffee I do have a better mentality about "it's ok to spend money" I limit myself going out to eat twice a week, and when I want a treat I simply go out and get it. (if I'm willing to leave the house).

[@celieboo]

My major lifestyle inflation mainly comes from insurance premiums. I pay about $2500/month in life, disability, and long term care insurance premiums. It costs a lot of money to protect higher incomes.

[@jakealering5711]

I disagree with you. I think it’s smart to not buy coffee and instead make it at home because some people are actually living pay check to pay check renting an overpriced apartment. In order to be well off and not struggling like you said you need to focus on bigger things such as a home. In order to get that house you need good credit as well as a nest egg for the down payment than you can house hack, get a few roommates and not have to pay for rent anymore which is the actual expense keeping people in poverty. But in order to do something like this you need that nest egg and for someone living paycheck to paycheck the only way to do that is by not buying random shit like coffee and canceling your Disney plus subscription you bought in 2018 to watch the Mandalorian. If someone disagrees please respond and lmk why I’m wrong because I trust this KZbinr more than my own judgment but to me not buying coffee makes perfect sense

[@BlueIron64]

It gives a lot of credibility that you pointed out that the average investor isn’t just making less than the S&P 500 return because they’re undisciplined, but because they don’t have enough money to risk that much of it. Also 10% as an assumption lmfaooo

[@yungifez]

I always look forward to your videos

[@switch4964]

Honestly my daily coffee is helping me streamline me building my credit. I only just got my financial well-being together a few years ago, so building credit has been a big point for me lately. I buy my coffee with my secured card. I don't spend over 60% of my credit line by the time my next paycheck comes around. It lets me pay those coffees off in one lump sum, build credit, get 2% cash back since it's a restaurant purchase and I pay it off before the statement closing date relying on my spending account until the billing cycle passes. I love it.

[@DidacticToast]

I believe there's a nuanced perspective to consider here. The advice to "avoid spending money on coffee" can be seen more as a call for discipline and intentional decision-making rather than a strict directive against coffee purchases. In my experience, making financial choices like buying overpriced coffee from Starbucks could lead to further impulsive spending on non-essential items, impacting my financial stability negatively. That said, I interpreted the advice as an encouragement to prepare my own coffee, which is a much more cost-effective option that still satisfies my caffeine needs and encouraged me to pause more on where I spent my money.

[@EliasCassab]

I tried budgeting, living off eating beans and low cost things, but then I realized that's at best saving me $300 a month, which is pretty cool don't get me wrong but it isn't worth the lower quality of life. My greatest expenses were actually large sum payments like rent, car, insurance and medical stuff. Pretty much necessities. When I came to that realization, I just accepted that some things are "beyond my control" and won't be fixed because I got a coffee at lunch or whatever

[@djm2189]

You're right, the only thing you could and should do, is get a higher paying job. I know, rocket science lol but it's true. Save that energy and grind by searching far and wide. Many weird industries will take you in, learn quick and move up fast.

[@EliasCassab]

@@djm2189 yep, “investing in yourself” should be the number 1 financial advice to give to a lot of people, especially educated middle class people. But that is far from encompassing everyone, as you should take into account things like environment, upbringing, health, resources, family situation etc. There isn’t a silver bullet formula that will solve all problems

[@Daikini0]

Great experiment, I always try to find things where I can save money, but reasonably maintaining the lifestyle I like. I think saving can be made on bigger expenses. I am driving a budget car with low maintenance, and low fuel cost. I bought it for USD 7000. Also trying to improve house heating efficiency. I drink coffees, but I am making it. Out of 36000 yearly salary (Hungarian salaries suck) I am trying to save 6000 a year for investments. Unfortunately I was stopped doing this 10 years ago, now I am 43 and restarted. Better late than never.

[@seileach67]

My folks raised us kids on a limited income, but even when we were struggling, they emphasized maintaining good health as much as possible--eat as much fresh stuff as we could afford, and especially with meat, "when in doubt, throw it out", etc. Their thinking was that the few dollars saved on eating food that was "off" was not worth potential hospital costs or worse. They did their best to provide as healthy a variety of fruits and greens as possible to supplement the processed food that was the mainstay of our household growing up. I think people should be encouraged to think of all these things and figure out for themselves what trade-offs between health, convenience, and short-term savings vs. long-term bills they are willing to make.

[@Amrit0596]

This would have been the channel if I decided to do KZbin. I have the same thought process and similar levels of realistic paranoia as you!

[@denniss3980]

What if you bought that coffee on a credit card with 21% interest, and only made minimum payments or just paid enough to make room for buying more coffee, what would that do to your retirement

[@Velkairiwyth]

Firm believer in making intentional mindful choices (an element that is often missing in these kinds of videos, it's not do or do not it's do it mindfully, enjoy, and don't over indulge) and living within your means, and making sure before you make the bigger purchase, is it the best value, do you really need it. Oh, and have a plan. Lived servicing debt for years, but it was necessary to get progress in my career. Still live frugally, but with a thrive > survive attitude. Budgeting, trying to make smart choices but making sure to enjoy the treats and experiences I can have. /end rant :D

[@obcane3072]

If it takes too much willpower to buy a nespresso for $200 with a frother and $.33 pods to make a cup of coffee at home instead of waiting 10-15 min a day to have someone make it for you while paying $5 then you won't be able to handle the bigger sacrifices that have more of an effect.

[@Droidman1231]

3/4s of people drink coffee? I didn't realize I was such a weirdo 😭

[@ramsundaram2696]

i love it when in life sometimes its worth stopping a bit and appreciating the little things in life such as sunshine, raindrops on my window and daffodils in the wind on a bright spring day

[@ramsundaram2696]

and boobis

[@alanbotula7549]

Well, yeah, but I think you're missing the larger point, which is to become the kind of person that would not spend money every day on something that could be had for much less at home. Look at your credit card statement and you'll see that most of the line items are not large, but together they add up to a big bill. It's not the coffee per se that gets you into trouble -- it's the attitude that says the little expenses are not hurting you. They are.

[@ForeverStapleton]

It’s not just coffee but alcohol as well. I stopped drinking twelve years ago and shocked how much people send on alcohol. Craft beer is just pissing money away. I don’t get it

[@nolesy34]

I just buy iy direct from the source, bolivia and columbia, i find it keeps me awake and going for days and days....

[@Matteo_the_Plague_Doctor]

Thank you for debunking grifters. I really appreciate it!

[@KTSpeedruns]

I want to tackle the nitty gritty numbers behind the coffee argument since I think it's so dumb. I don't think anybody actually goes out and gets a non-home coffee every single day, or even five times a week. I worked at a smoothie shop with drinks that were priced around the same, and I worked at a burger place with inexpensive food options where most people would spend less than $8 per person for their order. There isn't anybody who came in every single day, and even the regulars only came about three times a week. These purchases are used as a treat, or a last resort for avoid working on an empty stomach after oversleeping. To add onto that: no, your coffee you make at home is not a fixed 20 cents per serving when you make it at home. That's such a dishonest figure. Sure, if you buy the grounds at $5.99 and it takes a month to use it at one serving per day, your cost for the grounds is 20 cents per serving. But that's not including the electricity cost from keeping your coffee maker plugged in, the cost of the milk or creamer or additives you enjoy with your coffee, or the water cost for the water to make the coffee and the water to clean the cup. Add the cost of soap it takes to clean it, and 20 cents seems like a very low bar. But a bag of grounds costing $5.99 in reality will probably last about 15-20 servings, not 30. That comes out closer to 30 to 40 cents per serving. I'm not trying to validate anyone's choice to have Starbucks or McDonalds coffee as often as they do. I'm not trying to invalidate the choice of making coffee at home. I'm merely pointing out that there's so many factors to a purchase and so much nuance that breaking down anybody's financial struggle down to one repeated choice of how they treat themselves and keep up their morale is morally bankrupt itself. If that personal choice of how someone treats themselves is not doing any significant harm to themselves or others (i.e. smoking), we shouldn't be judging them for doing what they need to do to keep their spirits high so they can get through the awfulness of the day to day.

[@HesderOleh]

The only one of those costs that actually adds more than .1% to the cost of the coffee is the milk. Phantom power is almost negligible in modern appliances and you don't need to keep it plugged in. The cost of water used to make an espresso is about 0.007 cents. (30 ml at cost of $2.50 per kiloliter). If you are using a dishwasher which you should be for efficiency and cost then there may even me no marginal cost, unless your space for glasses/mugs is full before the rest of it. I generally use my coffee cup for water for the rest of the day, whether I am at the office or at home. As long as you pour a little bit of water in just after you finish your coffee and drink it, then there is no taste of coffee in it and there is no reason not to use it as your water glass or have tea in it later as well.