How to Make The Latte Factor Work for You

This post may contain affiliate links. Please refer to my Affiliate Disclosure for more information.

Want to start building personal wealth? Start with what you already have! The Latte Factor will show you how to do it.

One of David Bach’s many powerful books on finance, The Latte Factor teaches the importance of money management: it’s the small things that add up over time that make a big difference. A must-read for anyone who feels like their personal finance skills could use an upgrade. Get the book here to see why you don’t have to be rich to live rich.

It’s not always about how much money you make. It’s about how much you keep. Your habits won’t change when you start making more money. It’s typical that “The more we make, the more we can afford, so the more we spend.” (See 4 Reasons Why You Make A Lot Of Money But Have None on Good habits now will remain good habits when your income increases, and that’s when accumulating wealth really starts to snowball.

The Latte Factor is a quick, easy and inspiring read paired with great storytelling. Follow the fictional yet representative story of Zoey Daniels, a young woman in her late 20’s. She lives and works as an associate editor for a world-famous travel magazine New York City. Although she loves her job, she constantly wonders “Is this all there is to life?”

The Latte Factor

So what is The Latte Factor exactly? It’s not about giving up drinking expensive lattes, or about penny-pinching or denying yourself. It’s about getting clear on what really matters and prioritizing your life goals on a daily basis.

The Latte Factor is a metaphor. It could be anything you spend extra money on that you could happily do without.

Page 82

Maybe your latte factor is grabbing a latte and muffin on the way to work every morning. Or going to Whole Foods for lunch everyday because you feel lazy.

A latte factor could even be as small as getting fancy designs or embellishments on your nails when you go to the salon. You don’t have to give up getting your nails done, but do you really know how much “extra” your salon charges for rhinestones?

One of my latte factors was actually stopping at Starbucks on the way to work every morning. However, the only thing I ever ordered was a grande, half-sweet vanilla soy latte. When I did the math, those trips to Starbucks every morning were costing me at least $1,320 per year! So I got smart: I asked my SD for a latte machine as a gift!

For gift ideas that can help you build your own wealth, see my post Sugar Baby Gift Guide That Will Complement Your Financial Plan!

Myths of Money

There’s no Prince Charming coming with a big bag of cash. You have to be your own Prince Charming.

Page 73

As a experienced sugar baby, this statement made me chuckle. In the sugar bowl, there could most definitely be a man coming with a big bag of cash. With careful planning, you can use that sack of cash to pay off debt, build a nest egg or start a business.

Bach is right though, and it’s the underlying point to Zoey’s story. Even with a Prince Charming who has a big bag of cash just for you, there is no one to manage your money but yourself.

A man can help you financially by way of giving you money. However, no one can monitor your credit score or apply for credit cards but you. It’s even scary to be completely disengaged while an investment advisor handles your investments, with absolutely no understanding of what your portfolio contains.

Bach explains the 3 myths of money and why most people think these myths apply to their own lives. You won’t find these 3 lessons on any course outline at College or University – even in Business School.

Retirement planning – start as soon as possible

I’ve been there. When we’re young, the last thing we think about is retirement.

Bach discusses how important saving for retirement is. If you have a job that offers a retirement savings plan, sign up as soon as you’re eligible.

In the United States, a 401(k) Plan is a qualified profit-sharing plan that allows employees to contribute a portion of their wages to a retirement investment account. In Canada, our version of a 401(k) Plan is called a Group Registered Retirement Savings Plan ( Group RRSP).

When I landed my very first corporate job, a voluntary Group RRSP was part of my benefit package. My employer would match my contribution up to 4% of my gross pay. The first day I was eligible, I made myself sign up for my maximum amount which came out to $76 every two weeks.

An employer-matched RRSP program works like this:

You put in $76 per paycheque, and your employer matches that amount and puts in $76. That’s $152 deposited into your retirement account every paycheque. $76 of that $152 contribution is essentially free money – in addition to your salary! If you’re paid bi-weekly as I was (26 pay periods per year) you would receive $1,976 extra into your retirement account annually!

At that time in my life, I honestly had no idea how I was going to manage on $76 less per paycheque. I was stretched to my maximum financial limit. I knew it was in my best interest to make it work somehow, so I cut out some non-essential expenses to survive. After a while, I didn’t even notice the $76 shortage on my paycheque.

If you want to have a 9-5 job, try and land an employer who offers this type of retirement matching program. They don’t all, so choose your employer as carefully as you should choose your sugar daddy!

Start living and stop daydreaming

Is the way you’re living your life and making daily choices bringing you closer to your goals? Or are you sacrificing them for immediate pleasure?

Let’s say, like just like the main character of this book, Zoey Daniels, one of your life goals is to travel. You could be spending your money preparing your suitcase with the multitude of required travel essentials. Instead, you’re still paying monthly for that streaming service so you could watch that one series, after you swore you would cancel as soon as you finished binge watching.

Start putting your dreams into action: if you don’t have a passport, apply for it now. Subscribe to a digital luxury travel magazine, such as Condé Nast Traveler and start planning your trip. Or, if you’re like me and want the physical magazine so you can cut out the luxury glossy photos and put them on your vision board, subscribe to the print edition.

Elevating your lifestyle is not an instant gratification. It takes time, patience and consistency, and the will to give up that instant gratification for what really makes you happy – even if it takes a while to see the results.

The biggest question to ask yourself is this: Who are you building wealth for? Yourself, or someone else?

Get the book and learn how to apply the 3 Secrets of Financial Freedom:

  1. Pay yourself first
  2. Don’t budget – make it automatic
  3. Live rich NOW

It’s also available on Audible if you prefer to listen while you multitask. sign up here and get your first book and first 30 days free.

Other finance books by David Bach I have on my bookshelf include:

Another thing I really like about David Bach is that he has written many of his finance books in two editions: for the US and one for Canada.

For more of my book recommendations to help elevate your lifestyle, check out my Sugar Essentials Book List.

It’s my mission with Sugar Financial to help women learn how to build wealth for themselves. Ready to start building your own wealth? Start with utilizing what you already have and read this book to see how to make The Latte Factor work for you!


  1. Inspiring article! I especially liked the part about giving up things you don’t really want/need for things that you do.

    1. I agree, it’s inspiring to think of money in this way! One of my latte factors was actually getting a latte on the way to work – so I asked my SD for a latte machine!

Leave a Reply

Your email address will not be published. Required fields are marked *