What is the Latte Factor?

The 'Latte Factor' is a concept popularized by David Bach showing how small daily expenses, when invested instead, can grow into significant wealth over time due to compound interest.

Is ₹50/day really that significant?

Yes! ₹50/day invested at 12% for 30 years grows to over ₹1.58 Crore. Small amounts compound dramatically over long periods.

☕ Latte Factor Calculator

The hidden cost of your daily indulgences

Quick Presets

Daily Expense (₹)

Expected Annual Return (%)

Time Horizon (Years)

💸 You're giving up...

₹0

in 20 years

Total Spent

₹0

If Invested Instead

₹0

10 Years

₹0

20 Years

₹0

30 Years

₹0

📋 Assumptions Used v1.0

View full assumptions changelog →

Daily frequency: Expense occurs every day (365 days/year)
Investment timing: Monthly SIP equivalent (daily × 30.42)
Return rate: Pre-tax nominal returns
No inflation adjustment: Future value shown in today's rupees
Compounding: Monthly compounding assumed

Data verified: January 2026

🧮 How This Calculator Works

The Latte Factor calculator uses the standard SIP formula to compute opportunity cost:

                                Monthly Amount = Daily Expense × 30.42

                                FV = M × [(1 + r)^n - 1] / r × (1 + r)

                                Where:

                                M = Monthly investment

                                r = Monthly interest rate (annual / 12)

                                n = Total months

Why "Latte Factor"? The term was coined by author David Bach to illustrate how small, seemingly insignificant daily expenses can add up to substantial wealth if invested instead.