A Review of The Latte Factor

Reading nonfiction books is a great way to continue in our personal development journey! I recently finished David Bach’s The Latte Factor: Why You Don’t Have to Be Rich to Live Rich, and wanted to share my takeaways from the book. Here’s what I thought. 

OVERVIEW

Before giving my feedback, here’s a synopsis of the The Latte Factor for anyone who has not read it:

In this compelling, heartwarming parable, Bach and his bestselling coauthor John David Mann (The Go-Giver) tell the story of Zoey, a twenty-something woman living and working in New York City. Like many young professionals, Zoey is struggling to make ends meet under a growing burden of credit card and student loan debt, working crazy hours at her dream job but still not earning enough to provide a comfortable financial cushion. At her boss’s suggestion, she makes friends with Henry, the elderly barista at her favorite Brooklyn coffee shop. 

Henry soon reveals his “Three Secrets to Financial Freedom,” ideas Zoey dismisses at first but whose true power she ultimately comes to appreciate. Over the course of a single week, Zoey discovers that she already earns enough to secure her financial future and realize her truest dreams—all she has to do is make a few easy shifts in her everyday routine.

Source

NOT YOUR TYPICAL NONFICTION BOOK

First of all, I have to tell you that this is not a typical nonfiction book. At. All. 

The Latte Factor is actually written as a story, making it extremely easy to read. If you’re the kind of person who typically doesn’t like nonfiction books – especially financial ones because they can sometimes be dry with all their facts and figures – then this is a great one for you to check out. Seriously, it is such an easy read, even for someone like me who typically reads with heavy eyelids just before dozing off for the night.

Because it is written as a story, the lessons of the book were told through the narrative of Henry talking to Zoey. Though we are simply witnesses to this conversation, I couldn’t help but feel as if Henry was talking straight to me. It made learning from the book feel natural and unforced.

THE LATTE FACTOR

In the book, Henry talked to Zoey (and to me) about the “Latte Factor.” The Latte Factor is the idea that we all have money to invest, but we’re too busy spending it on small things every day. Like a latte from the coffee shop, for example.

Henry says that everyone’s Latte Factor could be different. It could be cigarettes. It could be eating out for lunch every day. It could be bottled water. It could be buying magazines at the supermarket checkout. It could be any number of small things where we are constantly spending a few dollars here or a few dollars there.

The point of the book was not that we shouldn’t occasionally treat ourselves to a coffee out (or whatever your thing is). But we have to be aware of where our money goes. When we pay attention to where our money goes, we get to be in charge of it. And when we’re in charge of it, we get to tell it exactly where it should go.

Henry said,

The latte factor isn’t about being a penny-pincher or denying yourself. It’s about getting clear on what matters. It’s about the little daily extravagances and frivolities, whatever they may be – the five, ten, twenty dollars a day that you could just as easily redirect toward your own future. From spending on yourself to paying yourself first. It’s about giving up something small to get up to something big.

SOME DAY IS TODAY

The overarching idea laid out in the book is that if I wait until the elusive “some day” to begin investing in myself financially, that day will never come. There will always be something else to spend money on – kids’ clothes, Christmas presents, a trip, or some emergency. Even if I get a raise, I’ll just spend more money instead of invest in myself. I have to start now, right where I am. And I have to be intentional.

Henry encouraged Zoey (and me) to list out all our daily purchases to see where our money actually goes. And then from that list, decide what we can cut so that we can begin to invest in ourselves.

When it comes to investing, Henry’s three principles of financial freedom were: 

1. Pay yourself first. Before you pay your bills and spend money for the month, invest money towards your financial freedom first. The future is coming, whether we want to acknowledge that or not, and we have to be prepared for it.
2. Don’t budget. Make saving automatic. If the first one seems difficult because you have to leave it up to your own willpower to make that investment, then #2 makes it easier – if you set up automatic transfers to your investments at the beginning of the month before your paycheck hits your account, you won’t be tempted to keep the money to spend on random things.
3. Live rich now. The idea is not just to save for retirement, but to invest your money in areas that bring you more fulfilment. Does that latte make your life richer? Or will putting that money towards a weekend getaway with your spouse or art lessons or whatever brings you joy be better? Once you set up your retirement savings, the book also encourages you to set up savings accounts for short-term financial goals that will make your life feel rich.

CONCLUSION

When I was writing this post, I did some extra research online, including reading reviews from other people. It was interesting to read that a lot of people find this book too basic. Some even think that it is too condescending towards women, with the main “teacher” being a man and the “student” being a young woman.

To those reviews I say this – the simplicity of the book is what made it so easy to read and learn from. Most financial books are dull and dry and confusing. This was none of those things. It could be that you already know all of the concepts this book teaches, and that’s great for you. But for people who are just starting out making financial plans for themselves or people like me who need a good kick in the rear to remind them that the future is now, then I would definitely recommend this book.

And about Henry as the teacher – in my opinion, he was in no way condescending to Zoey, and I never felt like this book talked down to women. Additionally, those reviews left out that Henry was not the only teacher – that there were in fact other women who helped Zoey on her financial journey as well. *sticks out tongue at the haters*

I loved the book and will likely read it again after I get it back from a friend who borrowed it from another friend I loaned it to. (I promise that sentence just made sense.)

Reading the book was great motivation to look at my spending to find my Latte Factor and see just where I could make my money work smarter for me. And that is a big win to me.

Is this a book you would consider reading? Let me know in the comments.

Until next time,

Jeri Austin