Last December, I wrote “When Coffee is Life” to explain why I am obsessed with my favorite drink. And in 2019, I’ve noticed the caffeine conversation growing on a national scale. Almost everywhere I’d turn, *coffee.*
Someone left a Starbucks cup on the set of Game of Thrones? Wild.
Luckin, the Starbucks of China, went IPO? Interesting.
Howard Schultz is running for president? Um, okay.
Wait, Suze Orman just said what?! Hold my coffee.
ICYMI, Orman, the legendary financial expert, stated back in March that buying coffee is the equivalent of “peeing $1 million down the drain.” It was a claim so hyperbolic that the very mathematics used to support it brought their own separate outrage and were walked back in a subsequent and similar story. (With respect to her initial claim, I don’t care if your name is Bobby Axelrod — you’re not getting a 12% annual rate of return on your money.*)
What’s my take? Orman might as well have spilled her espresso on my white sofa. Her indictment of my beloved beverage wasn’t even the most bothersome part. Rather, I take issue with her flippant assumption that Millennials don’t care how we spend our money when, in fact, so many of us make deliberate choices to spend on things that are important to us.
She assumes that we’re just *not thinking* when we spend that $3.00 on a cup of coffee. That we’ve put zero thought into our decision to buy a superior cup that’s brewed from the cafe around the corner instead of drinking the garbage water that spews out of a Keurig. She fails to grasp that our generation values attention to detail and cherishes experiences. Instead, she mischaracterizes us to the point of belittling us, like so many of her generation do.
While Barry Ritholtz, Ben Carlson and others have done an outstanding job of righting Orman’s wrongs with regards to both coffee and personal finance, I have more to add. If you know anything about my love for these two topics, then you may have guessed that I’ve been brewing something special behind the counter. Something that will hopefully end this debate once and for all. The last drop, if you will.
I give you, buythedrip.com.
A first of its kind financial calculator designed to illustrate how much money you’d have if you brewed your own coffee and invested the savings.
The calculator’s inputs can also be configured to show the savings under a myriad of financial conditions. So, whether you decide to cut back on your caffeine intake, reduce the number of specialty drinks you buy (like pour overs or lattes), or simply stop drinking coffee altogether, you can calculate precisely how those decisions affect your finances.
As fun as it was to create this tool, this whole buzz around the “latte factor” isn’t about how much money we spend on coffee. The calculator could have been created for just about any expense, large or small, and it would have told you the exact same thing: the monetary impact of a financial decision. This is all truly about control. Control over of your spending and, to a much greater extent, control over your financial life.
By having control, you won’t be upset if a (dare I say, dated?) financial expert attacks something as precious as your morning cup of coffee. By having control, you won’t be the target of clickbait headlines based on unrealistic and improbable assumptions. And by having control, you can try to strike the inherently difficult balance between saving for your financial goals and living your life to the fullest.
Gaining control remains the hardest part of personal finance, because much of it comes within. Both the emotional and behavioral components required to achieve control over your financial life are developed over time through discipline and determination. Experts, financial calculators and even tailored financial plans are nothing more than tools to help you get there.
Lastly, I want to give a special tip of the hat to my *coffee dealer* Trade Coffee for helping me spread the word about coffee and personal finance. You can check out my interview with them over on their blog.
*About that 12% assumption: I fail to understand why financial icons like Suze Orman and Dave Ramsey continue to use a 12% rate of return when virtually the entire professional community vehemently disagrees with its use. I hope they know there’s absolutely nothing wrong with changing your mind. It doesn’t need to be an admission of being wrong. Nonetheless, Suze doubles down on the assumption time and time again while Dave Ramsey goes as far as blocking you on social media for disagreeing with anything he has to say. It’s absurd, stubborn, irresponsible and a shameful display of leadership. They have done a lot of good over the years and there’s no reason to taint their legacies with this kind of behavior.
Speaking of coffee, come get caffeinated with us over on Twitter.
Critical. How do you take your coffee?
— Douglas A. Boneparth (@dougboneparth) May 25, 2019