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What is the latte factor? It’s a term made famous by David Bach in his book “Start Late, Finish Rich”. Mr Bach contends that saving a few dollars a day for your retirement rather than spending it on little purchases such as lattes, fancy coffees, bottled water, fast food, cigarettes, magazines and so on, can really make a difference between accumulating wealth and living paycheck to paycheck. Here’s the math:
$5 per day (the average cost of a latte and a muffin) x 7 days
= latte factor of $35 per week
$35 / week = $150 / month
A latte factor of $150 per month invested at a rate of 10%
annual return for
1 year = $1,885
2 years = $3,967
5 years =$11,616
10 years = $30,727
15 years = $62,171
30 years = $339,073
40 years = $948,611
Saving $150 dollars per month for your future is a worthy goal. Many people fail to save anything for their retirement, and no doubt will regret it later. But there’s just one problem with this system, no lattes for 40 years! OMG! Doesn’t seem feasible in the long term. Perhaps the problem isn’t the latte, its that everyone’s buying it from Starbucks, or some similarly over-priced establishment.
If good coffee rather than the logo on the cup is what you’re after, there’s definitely a solution: make your own (no long lines necessary). If you want to increase your savings even further, find coupons for the needed ingredients. Using coupons in general when grocery shopping can save you significantly more than $150 per month, especially if you have a large family.
how to make a latte on the cheap
I know what you’re thinking, time for the “Ghetto Latte” (i.e. ordering a single or double shot of espresso at your local coffee shop then heading to the condiment bar to use free milk to make the latte). I guess that’s okay in a pinch, but a shot of espresso still costs $1.00, or fifty cents if you add it to a $1.50 cup of coffee. But, you can make a real latte for pennies.
A cafe latte is a simple Italian drink, and you don’t need a pump-driven espresso machine costing several hundred dollars to make one. Even a $50 Krups steam-driven espresso machine is unnecessary. Every morning, the typical Italian pulls out their Moka Express, a stovetop espresso-maker that costs $19.95 at Amazon for a 3-cup pot or $25 for a 6-cup.
Made in 1933 by Alfonso Bialetti, the unit makes anywhere from 1 to 18 2-ounce servings of espresso in 4 to 5 minutes depending on size. Just fill the lower chamber with water and the top filter with fine-ground coffee. Then place the pot on the stove and heat until the water boils. Through a pressurizing process, espresso moves to the upper chamber of the pot, ready to be served.
To make a latte, fill half a coffee mug with milk, heat it in the microwave until it’s hot, and then top it off with espresso.This is a traditional Italian cafe latte, what’s called in coffee shops “Flat White” (i.e. no foam). If you want to Americanize it and add foam, there’s another useful product available called the Aerolatte.
This cute handheld milk frother is fun and easy to use; British celebrity chef Nigella Lawson recommends it over steam-driven frothers. Plus, in addition to its most popular use, creating delicate foam for homemade cappuccinos, lattes, or hot chocolates, the Aerolatte milk frother can be used for other treats. An enclosed recipe sheet offers ideas for fruit “shakes” and coffee frappes that can be made with any kind of cow, goat, sheep, soy or rice milk! Some restaurant chefs even froth milk to foam garnish earthy soups. It costs just $19.
So, now you can produce authentic cafe lattes at home (with foam) for less than $40. Just skip 10 Starbucks cafe lattes and you’ll have enough money for the equipment, a small sacrifice that’s well worth it. How much will your homebrew cost after the equipment is paid for? Depends on the cost of the coffee beans (ground, otherwise you’ll have to buy a grinder).
You can buy expensive premium coffee like Illy, $14 per 8.8 oz can, or you can go with an excellent Cuban coffee, Cafe Bustelo. This coffee can be found in most grocery stores for $3.50 per 10 oz bag or can and gives premium brands a run for their money. Of course, if you go with the Cuban coffee, you can’t really call it cafe latte any more, it’s now cafe con leche.
