Sweet Read: The Latte Factor by David Bach

Coffee Cup

Have you ever heard of the term, The Latte Factor? If so, What do you think about The Latte Factor?

If you haven’t heard of it, The “Latte Factor” is a term that equates to saving and/or investing a large amount of money by not spending money on daily lattes. However, your “latte factor” doesn’t have to be a latte. Instead it could be cigarettes or maybe even avocado toast.

Do you think grabbing a cup of coffee every day is keeping you broke or keeping you from your financial goals? Or does that cup of coffee not really matter because its only a few dollars a day. The average cup of coffee can cost $3 – $5 a day, even more if you purchase coffee more than once a day or if you add on another treat at the coffee shop. In David Bach’s (with John David Mann) latest book, entitled, “The Latte Factor – Why You Don’t Have to Be Rich to Live Rich” explores The Latte Factor through the lens of a millennial young lady named Zoey.

Zoey is going about her daily routine as normal and one day notices a specific photograph in a coffee shop but feels she can’t afford to buy it because she is broke. She meets a barista named Henry and over a few visits they start talking and conversations around money start. I won’t give the story away but Henry points out to her that she is richer than she thinks and goes into the Three Secrets to Financial Freedom which is essentially the book’s big idea.

The Three Secrets to Financial Freedom

1. Pay Yourself First.

The first hour of your income is yours and you should invest it. For example, if you invest $10 a day and it earns 10% annual interest, after 40 years, you’d have $1,897,224. Almost 2 Million dollars! In this example, you make $10 per hour but if you make $25 per hour then you would invest $25 a day.

Sugar and Money Tip: Make paying yourself non-negotiable.

The Latte Factor

2. Don’t Budget – Make it Automatic.

Well if you know me, I definitely believe in budgeting but also highly believe in automating everything financially that I can. By automating finances you are able to make sure the following things happen: bills aren’t skipped,  bill aren’t paid late, savings is drafted and sent to the appropriate account(s), designed funds are sent to investments like retirement account(s). In, “The Latte Factor” Bach writes, “Set up a simple, automatic system that will run by itself in the unseen background so it takes zero discipline, zero self control, zero willpower. Just set it up and let it run.”

Sugar and Money Tip: Automate your finances, because if it isn’t in your bank account, you can’t spend it. Examples: 401k, IRA, Sinking Funds, etc.

3. Figure out what matters and follow that! Live Rich Now!

With this secret, think about things that truly bring you joy and focus on those things. Build in ways to enjoy those things now and not some far off future. Some ideas could be to travel, attend a specialized class like dance or cooking that you’ve always wanted to do or plan to take a sabbatical.

Sugar and Money Tip: Brainstorm the things that truly evoke joy in your life and write them down. What do you want to do that truly makes you happy?

Final Thoughts on The Latte Factor

The book was an easy read and I love that it was written as a story. The book held my attention the whole time and it also provided great financial charts for review.  The story about Zoey and discovering her path to financial freedom is a story that I think many people can relate to. I recommend this book to not only read but to apply to your life and take action. No one is getting younger and everyone should consider all 3 Financial Secrets and how they can be applied to your life. “The Latte Factor” can be picked up from your local library or by clicking here to purchase from Amazon.

As a lover of personal finance and blogger, I am always interested in new personal finance books and I enjoyed that this was a short read and it was written as a story versus filled with numbers and facts. It made the book more relatable but numbers and facts was still included when appropriate.

Other books by David Bach include:

Smart Women, Finish Rich

The Automatic Millionaire 

Please comment below: Do you have a latte factor? Is there a small expense that you spend on regularly that if eliminated could grow into a nice nest egg when compounded with interest over the next 20, 30 or 40 years? Let me know and Thank you so much for reading.



  1. Charis
    August 25, 2019 / 4:14 pm

    Gotta get this book! Such a great analysis!

    • SugarJackie
      August 26, 2019 / 3:06 am

      Thank you! Please let me know what you think after reading it.

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