Today, after spending over $9 on a large latte and a puny piece of banana bread, I considered what would happen if I and others didn’t drink and eat all that trendy coffee and ‘artisanal’ snacks made by so many sullen, multiple-pierced, tattooed baristas…with green hair and man buns. (Is this a dress code?)

I can’t even imagine the money we all would have saved.

Wait, yes I can. I’m a financial expert with mad math skills!

So let’s do this:

People in America ages 25-34 spend on average $2,008 a year on coffee and treats (avocado toast, et al.).

Wow! But the majority of them complain they’re always broke and don’t have IRAs or any retirement savings! And many of them are still supported fully or partially by their parents, in an economy with FULL EMPLOYMENT. Let that sink in for a moment. Just wow.

Are they really as “woke” as they claim to be, or just delusional and perpetually broke from the bad decisions they make daily?

The next closest age group, those 35-44, spend $1,410 per year. Still a lot. And they don’t have any retirement savings either.

Take the median between the two and it’s $1,709 a year for the average American between 25 and 44.

If you saved that money each year for 20 years and earned 7% compounded annually for that period, you would have $74,966.00 at the end of 20 years.

Now it gets interesting. Raise that investment amount to $6,000 per year, and invest properly and regularly for 40 years, and it is quite possible to reach five or six million in assets!


The first step is to begin to contribute to a 401(k) or employer-sponsored retirement plan. Most employers will match your contributions as a percentage of your pay. For example, if you contribute 4% of your salary and your employer matches 4%, you’ve already got a 100% return on your investment!

Next, open up a Roth IRA at a brokerage firm. As long as you have an earned income, you can contribute a total of $5,500 each year. If you’re married, you can contribute $5,500 for each person, even if one of them doesn’t earn an income.

Your goal is to invest 15% of your gross income, so if you make $40,000 a year and invest 4%, or $1,600, in your 401(k), you’ll only need to invest $4,400 in your Roth IRA to meet that goal.

In both your 401(k) and your Roth IRA, you’ll invest in mutual funds with a long track record of above-average returns. Put a percentage of your investment in each of these four categories: growth, aggressive growth, growth and income, and international. You can consult with an investment advisor to tailor your portfolio to your needs and risk tolerance. Generally the younger you are, the more “risk” you can afford to take and the higher your expect ions for returns should be.

The last step is to just keep making contributions and wait. Continue to make contributions whether your investments and the markets are up or down, and don’t take ANY of your money out for ANY reason.

The Large Cap index in America between 1923 and 2018 has grown at an average annual rate of 12.18%.

A 30-year-old who follows the plan mentioned here and gets the same returns will have nearly $6 million by the time he’s 70, without ever increasing his contribution level! If markets return less, of course the results will be lower, but still very substantial. Time in the market, not timing the market, is always the key.

As The Rolling Stones said, “Time Waits For No One”.

Lastly, as an aside: who is expected to pay for the retirement (and fancy coffees) of all these young people in 30-40 years if they fail to save money now? Social Security won’t cut it and likely won’t be there. Who pays? What’s their plan? It’s the Ancient Greek proverb by Aesop of the Ant and the Grasshopper writ large. If they shirk their responsibilities, socialism and redistribution of wealth through forceable confiscation looks better and better to these broke and flighty grasshoppers, who don’t sacrifice and save like the dutiful ant.

Let me suggest this: Show this to your kids. Teach your children now about money so they don’t overburden or destroy our great free society later. Motivate them to create their own destiny instead of coddling them like so many poached eggs, or they will scramble our free republic in a frittata of half-baked ideas.

Maybe we should just encourage our kids to open coffee shops or street carts and learn what running a business is all about while profiting from all the other time and money-wasters in their age group.

Hey, it’s a start.

Categories: Uncategorized

3 replies »

  1. When I was a student at NYU a luxury for me was a falafel and a Coke at a little place on Jane Street. I would buy books from street vendors. Rimbaud and Henry Miller right on the sidewalk!
    I once brought Anthony Rizzuto to the falafel place.
    I asked him how he enjoyed it.
    His response:
    ‘I fel awful!’
    What a wise guy!

    Liked by 1 person

  2. I agree. Forget the coffee, see how much they pay for their smell phone, their cobble television, everything their professulas tell them the MUST have (check the subway ads for varieties of skin creams for men). But I gotta give them one break, if you count monstrous bank fees, those kids are faced with negative interest rates and secular stagnation, so all your fancy calculations plonk into the turlentine.


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