The Latte Factor Summary

The Latte Factor Summary and Review |  Book by David Bach

Why You Don’t Have to Be Rich to Live Rich

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The Latte Factor is a financial concept introduced in the book of the same name by David Bach and John David Mann. It states that small daily expenses can add up and impact saving and investing for the future. The book advises cutting back on these expenses and investing the money instead. It also emphasizes the power of compound interest and the importance of automating savings and setting financial goals. The concept encourages redirecting small daily expenses into savings and investments for long-term growth.

About David Bach and John David Mann

David Bach is an American financial author, motivational speaker, and entrepreneur. He is best known for his series of books on personal finance, including “The Automatic Millionaire,” “Smart Women Finish Rich,” and “The Latte Factor.” He has written over 15 books and sold over 7 million copies. 

John David Mann is a bestselling author, journalist, and publisher. He has written or co-authored over 30 books, including “The Go-Giver” with Bob Burg, “The One Minute Millionaire” with Mark Victor Hansen, and “The Latte Factor” with David Bach. 

He is a frequent speaker at conferences and events and has been featured in numerous publications, including Inc. Magazine and Entrepreneur Magazine. Furthermore, he is also the co-founder of the publishing company, Greenleaf Publishing. 

StoryShot #1: Identifying the Latte Factor

The book encourages you to identify and cut back on your small expenses, and instead invest that money into a savings or investment account. The authors give examples of how much money you can save by cutting back on daily expenses, such as buying a latte every day.

The Latte Factor is the small daily expenses we all have that, over time, add up to a lot of money. It’s that $5 latte you buy every morning, the $3 bottled water, the $10 lunch you grab on the go. It’s the little things you buy that you think won’t make a difference in your finances, but they do.

The book provides examples of the Latte Factor in action. For instance, if you spend $5 on a latte every day, that’s $1,825 a year. If you invest that money instead, over 30 years at a 7% average annual growth rate, it would grow to over $163,000.

The authors also mention other examples of your Latte Factor such as buying a pack of cigarettes, eating out, buying a soda or coffee while running errands, and buying lottery tickets. They suggest that by cutting back on these small expenses, you can save hundreds or even thousands of dollars each year.

“It’s not about the coffee, it’s about the math” the authors say. They point out that it’s not about giving up small luxuries completely, but about being aware of how much money you are spending on them and making a conscious decision about whether or not it’s worth it in the long run.

Track Your Own Latte Factor Expenses

The book also includes worksheets and exercises to help you identify and track your own Latte Factor expenses, so you can see for yourself how much money you could be saving.

Some examples of the worksheets and exercises provided in the book are:

  • A Latte Factor worksheet that asks you to list your daily expenses and the cost of each one. It helps you to see how much you are spending on small luxuries, such as coffee, snacks, or cigarettes.
  • A spending diary exercise, where you track your expenses for a week or a month, to help you identify areas where you may be overspending.
  • A savings plan worksheet, where you can set financial goals, such as saving for a down payment on a house or for retirement, and create a plan for achieving those goals.
  • A compound interest calculator, where you can enter your savings and investment amounts and see how much your money will grow over time.


We rate this book 3.8/5.

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