Homepage > Project Economy

'Latte Effect': Make Money By Skipping Coffee

Experts: Daily Coffee Spending Can Really Add Up

POSTED: 5:46 pm EST March 14, 2005
UPDATED: 2:42 pm EST March 16, 2005

Skip coffee and make money. Financial experts say it's possible if you buy into something called "the latte effect."

Coffee drinkers spend an average of $3 for their cup of morning coffee, reported KCRA-TV in Sacramento.

  SURVEY
How much do you spend on coffee each week?

"At the end of the month, we don't really encourage people to add up how much $3 a day is," coffee shop owner Dan Panasiuk said.

Experts say that same $3 could provide a shot at a lucrative retirement.

"The latte effect" refers what would happen if the $3 spent on coffee every day was invested in the stock market instead.

"I don't think people realize how much they're spending," financial planner Kurt Halverstadt said. "Three dollars a day, $90 a month, eight percent interest over 10 years."

That adds up to $16,000, the television station reported. In 20 years, it's $53,000. Invest that $90 a month of coffee money for 30 years, and you could have $134,000.

"You can put the numbers in front of them, show them what it takes and what the money can do for them over time and what you're going to find is that people are still going to go for the coffee," Halverstadt said.

Panasiuk is counting on it to fuel his retirement.

"We would be nothing without them, so we're really thankful for their business," he said.

Sometimes buying Starbucks can make you money.

Halverstadt said a $5,000 investment in 1992 when Starbucks had its initial public stock offering would now be worth $200,000.


Links We Like

You can pick your friends, but not your family -- or your neighbors. Here's what you need to know about how to deal with yours. More

Employers generally have options when it comes to hiring. Makes sure you present yourself as professionally as possible, or else. More

If you're looking to save on your next new vehicle, a low sticker price is just one aspect. Consider all the costs and make the right decision. More

Featured On 5