Int‘l Coffee Day: brewing your own lattè could add to your wealth, bigly

(FinancialPress) — A computer science major from University of Oxford has laid out your way to moderate wealth: cut the lattès.

It‘s a well-known fact that store-bought coffee sets you back a pretty penny over an extended period of time. Beth McMillan, a Ph.D. student in the aforementioned faculty, decided to do the actual math on the subject.

Your average latte, she found, sets you back $3.19 on average. If you were to invest that, every day, into an account that pays 6% interest, for a span of 50 years, you‘d wind up with a healthy $337,942.69.

In conclusion, she demonstrated that the lattè millionaire concept is a fallacy, but that‘s still a number that will get most people to reconsider their Starbucks habit.

However, the computer science savant is none too impressed with the results, nor with people yapping about urban legends such as that cutting your coffee consumption and saving instead will make you a millionaire.

“It bothers me that people widely share these tidbits without checking them first.”

“I don’t disagree with the message — it’s great to save money on small, everyday things, and it does add up quickly. However, people who become millionaires must also have a high income.”

In case you were wondering, McMillan brews her own coffee.

David Branch‘s “The Automatic Millionaire“ book served as inspiration. In it, “The Latte Factor“ was coined.

He mentions on his website that small expenses have to be closely observed and taken care of in order to attain riches. He goes as far as offering a calculator to factor small dents to personal finance such as cigarettes, ATM fees among others.

A system and networks administrator of the Washington University in St. Louis has come up with another calculator, which also factors in a 4% investment yield on the expenses digitated into it. For a conservative example, a cup of coffee that goes out for $5 sets you back a pretty $1,250 yearly, using a 250-day work year. With the yield applied, over 10 years that adds up to $14,247.25.

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