Personal finance guru David Bach made the “latte factor” a popular way to save money. It goes something like this: eliminating (or at least cutting back on) those expensive trips to Starbucks can save you a bundle of money, which then can be saved, invested, and become quite a nest egg at retirement. For instance, if you save $5 a day on specialty coffees, you’ll save $1,825 a year. Save and invest that at 10% and 30 years down the road you’ll have almost $400,000.
CNN Money takes a different approach, suggesting fine coffee lovers consider buying a home espresso maker.
That way, they can still save a good amount of money and yet still enjoy the specialty coffees they love. To this end, CNN has made it easy for people to select their own espresso maker by rating five of the top-selling models. The best marks went to the $400 Breville Die-Cast Espresso Machine (800ESXL). The worst was the $600 KitchenAid Pro Line Series KPES100.
That seems a little pricey. If you can do without the espresso, you can get very flavorful cups of coffee from a french press, which you can pick up for under $50. We like our Bodum ($29.99 at Amazon).
So if you’re a three-Starbucks-a-day sort of person, it’s probably worth it to buy a machine and make your own coffee. Save the difference you would have spent at retail and you’ll be able to fund your retirement to boot.
A whole lotta lattes [CNN Money]