Hello Grasshoppa,

Im not sure if any of you heard of the “Latte Factor”.  If you read The Automatic Millionaire book by David Bach before, Im sure you are familiar with this concept. So what is the “Latte Factor”? Its a simple concept where small amount of money are spent on little purchases such as coffee, tea, cigarettes & others.

Whether its a cup of Starbucks, your favorite Tealive or your favorite Boost Juice. Will it take a toll from your spending? Lets look at average price for 1 cup of Starbucks Coffee.

1 Cup of Starbucks = RM15.00 (Average)
Average Coffee Consumption Days = 20 Days

RM15 x 20 Days = RM300/Month
RM300 x 12 Month = RM3,600/Year
RM3,600 x 10 Years = RM36,000/Decade

RM300 per month for coffee might be low but if you look at RM3600 per annum, it seems to be a bit high.

What can you do with RM300 per month? 

• Gym Membership
• Invest in Mutual Fund, Gold & etc

What can you do with RM3600 per year?

• Nice Holiday to Nearby Country such as Thailand, China, Vietnam & etc
• Invest in Stocks, Mutual Fund, P2P Financing & etc

What if you Invest the Money? What is the Return of Investment (ROI) for the next few years?

If you refer above, RM3,600 with estimated 7% ROI, you are able to earn RM252 per annum. With the Power of Compounding, your ROI amount will increase over the next few years. On the 20th Year RM72,000 with ROI of 7% per annum, you will wind up with RM153,121.82.

Looking at the above number, do you think its possible to save RM10-RM20 from your daily spending? The answer is YES & with the Power of Compounding, you are one step closer to your Financial Goal.

I know you must be working hard & its a treat for working hard right? Its a good motivation to reward yourself a good cup of coffee with your hard work. I do that sometimes but not on daily basis.

Although I mentioned mostly about coffee as example, there might other small purchases that you make on daily basis as your “Latte Factor”. By now, Im sure you already know what is your “Latte Factor”. Take action now & you will achieve your Financial Goal soon.

OSS!