The Latte Lie & Other Myths

The Latte Lie & Other Myths

June 28, 2021

Sometimes the ideas we take for granted start to fall apart when we take a closer look.

Which of these personal finance myths have you heard?

Myth 1: “Giving up my lattes today will let me buy that Porsche tomorrow.”

The latte factor claims that by relinquishing small expenditures and investing what you would have spent on them, you can accumulate wealth. Diligence can make a difference, but it will take more than forfeiting your macchiatos to make it big. This strategy only stands a chance if you invest what you save… consistently… over decades. Easier said than done!

Myth 2: “A bank savings account is the more prudent place for keeping your money.”

When it comes to preserving our cash, many assume a bank savings account is the most secure place for it. But did you know money kept in savings may lose its purchasing power over time? In recent years, savings accounts rates have lagged inflation, so they might not be as prudent as you think. The appropriate strategy for you will be one that is designed to fit your time horizon, risk tolerance and personal goals.

Myth 3: “A penny saved it a penny earned.”

You may think this phrase is reminding you to be frugal, but what Benjamin Franklin really said was, “A penny saved is twopence clear.” So, what did Ben mean by that, back in 1737? By not spending a penny to buy an item on credit, you will have two pennies free and clear (one for the item, one for the interest), “saved” from the clutches of debt. Ben Franklin was encouraging the good people of his day to avoid owing money.

Whether you are spending, saving, or sipping a latte, enjoy it!


This is meant for educational purposes only.  It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions.  (06/21)