Lets debunk the highly criticized topic of personal finance: will buying coffee make you poor? Enjoy! Add me on Instagram: GPStephan
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This is a highly argued topic between two completely opposite ends of the spectrum:
In the one corner, you have financial “gurus” blaming millennial’s poor financial decisions on the purchase of avocado toast and the habits of buying the daily coffee…
And, in the other corner, we have the mindset that you should just buy it and enjoy life, because $3 isn’t going to make a difference in your lifestyle, and you should focus…INSTEAD…on the bigger picture.
Well, regardless of what your OPINION is on the cost of coffee…research doesn’t lie:
According to the investment app, Acorns, more than 45% of 18-23 year olds have spent more money on coffee than investing in their retirement…and 35% of 24 to 35 years olds have done the same.
I think it’s safe to say, that regardless of the wage gap, inflation, rising cost of housing, and the skyrocketing cost of education…spending more on coffee, than you do on retirement, IS ridiculous.
And when it comes to the topic in question…COFFEE…the statistics DON’T LIE:
The average American is spending $20 per week, or almost $1100 PER YEAR…on coffee…
And even WORSE, is that those aged 18-34 spend $10 MORE per week on coffee than the 45-and-older demographic…
https://consumerist.com/2012/01/20/most-american-workers-spend-more-than-1000year-on-coffee/
Here’s the thing: A $5 cup of coffee every now and then isn’t going to make you poor. It isn’t going to make a big difference in your budget, and it isn’t going to prevent you from buying a property. However, I think the bigger issue isn’t so much a small purchase every now and then…instead, it’s the cumulation of MANY small purchases, scattered throughout your day, that you just don’t pay attention to, that can wreck havoc on your budget.
And this is where I believe most people get lost: they take the “don’t buy coffee” advice way too literally, without understanding the deeper metaphor of what they’re REALLY saying: that you CANNOT be frivolously spending money unless you can afford it, without being able to justify its value.
So will a coffee make you poor? It’s Debatable.
On the one hand, if you just invested that $5 cup of coffee every day for 45 years…and you got a 7% return adjusted for inflation…you’d have $557,000 left over at your disposal. That’s the power of meticulously tracking your spending, and realizing how much it’s worth in the long term – and that your $5 daily coffee is a splurge and should be treated as such.
But on the other hand, life is to be enjoyed. Life isn’t about looking at numbers on a computer screen and realizing you haven’t enjoyed yourself or experienced everything life has to offer. And if a $5 cup of coffee is going to make your day that much more fulfilling, I’m all for it.
And really, the whole point of all of this video is just to realize WHERE your money is being spent, determining if that’s a good use of your money compared to the OTHER alternatives – like making coffee at home – and then applying that to EVERYTHING else in your life.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
