Latte Factor Calculator (Opportunity Cost)
Discover how much your daily coffee, smoking, or subscription habits are costing your future self if invested instead.
The Habit
$
Coffee, cigarettes, lunch, subscriptions...
The Investment Logic
Latte Factor Calculator (Opportunity Cost) Methodology & Instructions
Step-By-Step Guide
- Enter the cost of your daily habit (e.g. $5 for a coffee).
- Select the theoretical return rate if you invested it instead (S&P 500 averages ~8%).
- Select a time horizon.
- Click calculate to experience the psychological shock of Compound Growth.
Compound Growth on PMT
Future Value = PMT × (((1 + r/n)^(nt) - 1) / (r/n))
Understanding Your Results
| Concept | Definition |
|---|---|
| Opportunity Cost | Every dollar spent on a depreciating or consumable item is a dollar that cannot be invested to earn Compound Growth over time. |
| Compound Growth | When your investments earn financing/profit, and then that financing/profit earns financing/profit next year. This is how a daily $5 habit turns into $200,000+ over 30 years. |
Frequently Asked Questions
What is the Latte Factor?
Coined by David Bach, the Latte Factor points out how small, regular expenses (like a $5 daily coffee) compound into massive amounts of money over time if that capital had been invested instead.
Is the Latte Factor just about coffee?
No. It represents any small, habitual leak in your finances—cigarettes, app subscriptions, bottled water, or fast food.
Standardized Calculation Engine · Last updated July 6, 2026