The Latte Factor


Title: The Latte Factor
Authors: David Bach and John David Mann
Genre: Personal Finance
DS Rating: 3/5

Saving money for the near future is a challenge; saving money for retirement can be daunting. In fact, according to, about 1 in 5 American’s don’t contribute to their savings at all.

David Bach understands; he’s written many books about savings, retirement, and how to finish rich. His latest, The Latte Factor, written in conjunction with John David Mann,  is one such treasure. The content of the book, which is woven into a fictional story, is a bit dry in the beginning but quickly picks up speed. It can easily be read in one or two sittings. The valuable lesson? Regularly saving a small amount now can add up to big savings later. The power of the compound effect.

Many companies also understand the savings struggle and make it a no-brainer by offering 104(k) retirement plans, often with a hefty match. A 401(k) allows you to save incrementally with each paycheck. You can even use pre-tax money to fund your account, which means your contributions are taken from your paycheck before taxes are deducted, lowering the amount of income you have to pay taxes on. Win-win.

You might be wondering who’s thinking about retirement right now? It’s decades away. True, but start saving in your early twenties, and you’ll be in a great place financially once you hit retirement age. Imagine the day you never have to clock into work, sit in a cubicle, and get up before the sun rises. Think of all the traveling you’ll do and fun you’ll have with all that extra cash! If you’re in your thirties or forties without a dime saved up, there’s no time like the present – you can (and should!) still contribute to a retirement plan if your employer offers one.

The Latte Factor also touches on spending. Every little bit you spend each day adds up – from that morning latte to afternoon pick-me-up, you could end up spending over $30 a day in nonsensical things. The author(s) suggest packing a lunch, brewing your own coffee, and keeping track of how much of your money flies out of your wallet on the daily. That $150 mindlessly spent during a work week could easily be put into savings. Remember, it all adds up.

The Bottom Line: This is one book you can afford to check out (from the library, of course) – if only for the immensely helpful and eye-opening savings spreadsheets in the appendix. They are a gold mine. It’s never too late to start saving for retirement, but the earlier you do, the more cash you’ll have on hand. Great read!

*This post is purely a review of The Latte Factor. It is not sponsored by the authors and I am not affiliated with them in any way. I also will not receive any compensation from the included above; I just thought the book was enlightening. I encourage you to consult a financial planner/manager/consultant prior to making financial decisions or changing anything about your current 401(k) plan.

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