David Bach named a cash-flow fact: a small recurring spend, redirected into an invested account, compounds. It is not a retirement plan. Coffee is not why most people miss FIRE.
His CNBC table used $150 a month at 10% nominal: $339,073 in 30 years, $948,611 in 40. Those dollars ignore inflation and tax. The planning number: $150 at month-end for 30 years at 5% real, tax-advantaged.
FV = 150 × [((1 + 0.05/12)^360 − 1) / (0.05/12)] = $124,839
You put in $54,000. A $50,000 life needs about $1.25 million at 25×. This annuity is 10% of that and supports about $4,994 a year at 4%. BLS CEX 2024: housing $26,266 — about 14× a $5 daily coffee.
This week: export 90 days of transactions. Circle three recurring leaks you would not miss. Transfer that exact amount automatically. Run the monthly total in the LatteFactor calculator at 5% real.