Saturday, October 11, 2014

Your daily latte

Saw this article on Marketplace.org today about the cost of daily latte.   Apparently, at some point in the past, the meme was that you're going to live in poverty at retirement because of your latte habit today.

I wanted to check the numbers, so if you assume 250 $5 coffees a year over 30 years, I reckon the future value is about $70,000 in today's dollars.

I assumed a 4% after inflation return, which is important, because I am basically assuming that in real terms, the cost of a coffee stays at about $5.

While $70K is not going to make a monumental difference at retirement, it isn't chump change!