How to Use the Latte Factor Calculator — Daily Spending Guide

Learn how to calculate the true long-term cost of daily habits. Step-by-step guide with tips on which spending trade-offs are actually worth making.

1. Step 1: Enter a daily spending habit
   Name the habit (e.g., 'Morning Coffee', 'Lunch Out', 'Netflix') and enter the daily cost. For weekly habits like dining out, divide the weekly cost by 7 for a daily average.
2. Step 2: Set the assumed annual investment return
   The default is 7%, which approximates the historical average return of a diversified stock market index fund after inflation. Use 4–5% for a more conservative estimate.
3. Step 3: View the 5, 10, and 20-year opportunity cost
   The calculator shows what the daily amount would grow to if invested consistently over 5, 10, and 20 years. The 20-year figure is often startling.
4. Step 4: Add multiple habits to compare
   Add your coffee, lunch, subscriptions, and other habits to see the combined opportunity cost. This gives you a complete picture of your discretionary spending trade-offs.
5. Step 5: Make a conscious decision
   The goal isn't to eliminate all enjoyment — it's to make trade-offs consciously. Maybe the coffee stays; maybe the unused streaming subscription goes.

← Try the tool now