Book Review: The Latte Factor Shares David Bach's Three Secrets to Financial Freedom

“I’m not saying that you have to stop drinking lattes.  It’s not about your coffee.  The latte factor is a metaphor. It can be anything that you spend extra money on that you can happily do without.”
— From the Latte Factor

My initial reaction to David Bach’s The Latte Factor was - please don’t tell me that I have to give up my almond milk cappuccino because it is one of the few simple pleasures in my otherwise complicated life.  A cappuccino and a good book bring me great joy.  Thankfully, the book is about creating financial health and success so that we can all enjoy the things in life that brings us joy, without any guilt.

This motivational book follows Zoey, a 27-year-old editor who is working long hours, living in a cramped apartment in New York and struggling to pay her bills.  She gets financial and life advice from Henry, the “barista” at her favorite coffee shop, and her boss, Barbara. It is a very realistic story that unfolds in a manner that keeps the reading invested in the main character and her life choices.  It is a very easy read; I finished it in one sitting (about 3 hours).  

The three secrets to financial freedom are: Pay yourself first, make it automatic, and live rich now (after you narrow down what is most important in your life).  Most of the advice will be familiar but since many of us live paycheck to paycheck, it is clear that we all need to hear it repeatedly until we start to apply it to our lives, even in very small ways.  I am also aware that there are many other factors outside of our control that contribute to our financial struggles. I remember when saving even a penny was impossible; as a matter of fact, I considered myself lucky if I found a penny in the street.

The most important takeaways for me were: 

  1. Get clear on what matters to you. Eliminate some of the extravagances and frivolities and redirect it towards your future.  Pay yourself first and then spend responsibly. You don’t have to put off your best life until you retire but you have to make wise decisions.

  2. If you can afford this daily latte, perhaps you are richer than you think - the solution to your money problem isn’t more money; it’ is changing your habits. Your money habits will not change because your income has increased. 

  3. You work 40+ hours per week, how many of those hours did you work for yourself? Did the money that you made in the first hour of work go to you so that you can build your life and invest in yourself, instead of just taxes, bills, rental payments. 

  4. Invest in a tax-deferred account because your money grows exponentially faster when it is not taxed when you are growing it.

  5. Purchase used cars and pay cash if you can.


There was also some good advice for women from Zoey’s boss, Barbara.  She offered that women live an average of 7 years longer than men. 80% of married men die married and 80% of married women die widowed. Four of five widows living in poverty were not poor until their husbands die.   In the story, Zoey’s ailing mother turned over all financial decisions to her husband.  Barbara advised women to be knowledgable about their finances and don’t wait until divorce or a husband’s death to take an active role in their financial health.

The strength of the Latte Factor is that it will surely motivate you to identify what matters the most in your life and put yourself in a  position to be financially able to live your best life.  Once you are motivated and ready to take action, read David’s book, the Automatic Millionaire or consult a reputable financial advisor.

Once you figure out what matters the most in your life, you can save and spend in a manner that allows you to live your best life.  Cheers to financial freedom! 

The Latte Factor is written by David Bach and John David Mann. More substantive information, including worksheets and interviews can be found at