How this is calculated
monthly amount = daily × 30.44; then each month: balance = balance × (1 + rate ÷ 12) + monthly amount
The 'latte factor' is the observation — popularized by author David Bach — that small recurring expenses compound into startling sums when redirected into investments. The math here is simple: your daily amount becomes a monthly contribution (× 30.44, the average month), compounding at your chosen return.
A $5 daily habit is about $152 a month. Spent, that's $36,500 over twenty years. Invested at 7%, it's roughly $79,000 — the extra ~$42,000 is compounding, not sacrifice. The lesson isn't that coffee is evil; it's that time is the multiplier, and daily amounts secretly operate on twenty-year scales.
Be honest in both directions, though. If the latte is the best two dollars of joy in your day, keep it — cutting joy rarely survives long enough to compound. The habits worth running through this tool are the ones you barely notice or wouldn't miss: the unused subscription, the delivery-fee lunch that a packed one replaces, the brand markup you don't taste. Redirect those, automatically, and let the chart above do its quiet work.
Frequently asked questions
Is this anti-coffee propaganda?
No. It's a time-scale converter: it translates 'small daily' into 'large decadal' so you can decide with full information. Plenty of daily spends are worth every cent — this just shows the cent count.
Why 30.44 days per month?
It's the average month length (365.25 ÷ 12), so daily habits convert accurately instead of the common ×30 shortcut that undercounts by ~1.5%.
Does the calculation account for the price of the habit rising?
No — both the spend and the returns are in today's terms. If the habit's price rises with inflation and your investments beat inflation, the real picture is close to what's shown.
What should I actually do with a cut expense?
Automate it — set up an automatic transfer of the same amount to savings or investments the day after payday. Money 'saved' but left in checking gets absorbed; money moved automatically actually compounds.