Coffee Isn't Keeping You Poor

My Rich Nerds,

The words, “You can’t afford a home because you buy coffee every day”, make your Unc cringe…
Usually delivered by a boomer who thinks financial success requires zero joy, beans and rice forever, no subscriptions, and public transportation only. My response is typically, “bruh…”
The main reason home affordability feels like a pipe dream isn’t your latte, it’s that wages haven’t kept pace with the cost of living (which is out of our control). Today, I want to focus on what is in our control, but first, to make your ninth-grade debate teacher proud, let’s actually play along and test the coffee argument.

Buying a $6 coffee, boba, or matcha (I’m including matcha so Jaylynn doesn’t kill me 😭) every single day for a year adds up to $2,190. If you'd invested that $2,190 each year in the stock market over the last 30 years, you'd have earned about $220,000 (after inflation). Seems pretty significant, right? But why give up something you love when there are larger wealth killers out there?

Enter an Italian. Not Mario. Not Luigi. Not Wario. Not Waluigi. A real one: Vilfredo Pareto. Pareto studied peas in his garden (hey, they didn’t have TikTok to scroll back then) and noticed something weird: about 20% of his pea pods produced 80% of the healthy peas. That pattern — the Pareto Principle — shows up everywhere. Roughly 80% of outcomes come from 20% of inputs. In Rich Nerd terms, only a few stat points in your skill tree control your wealth, and your drink choice is not one of them (unless you have a serious addiction).

If you want real progress, aim at the heavy hitters: housing costs, transportation costs, salary negotiation, and learning high-value skills.

People will stress over a $6 coffee, then casually sign a $750 car payment for six years like it’s a Netflix subscription. Real data shows owning and operating a car can easily run about $12,000 per year (~$1,000+/month) once you include depreciation, fuel, insurance, maintenance, registration, and financing. At the end of the day, we are just trying to get from point A to point B. Cut $300 a month here, and over 30 years, the opportunity cost is ~$317,000. Or redirect some of that to have fun (might I suggest a game called Arc Raiders). Also, shop around for car insurance every year, as prices have skyrocketed in recent years.

Similar story with housing. Most people spend 30–50% of their income just existing indoors. Our Rich Nerd Housing META says to keep housing no more than 30% of gross income. In reality, renters spend up to 37% on rent, and homeowners often spend ~45% once you add interest, taxes, insurance, maintenance/repairs. A few hundred dollars difference in rent doesn’t sound sexy, but over a year, that can be $3,600–$6,000. Over thirty years? We’re talking $317,000–$529,000.

Personal finance gurus love telling people to cut, cut, cut on the spending side while barely touching the earning side. Even when earnings come up, people ask me, “Imran, what’s the highest APY savings account?” Do we really want to hop from bank to bank chasing an extra 0.5% APY — opening accounts, tracking rates, moving money around like you’re Marty Byrde (highly recommend the show Ozark)? If you’ve got $50,000 in savings, going from 1.0% → 1.5% APY earns about $250 a year. Meh. You can beat that with one decent salary negotiation or by picking up a single high-value skill.

My first job out of college offered me $48,000 per year. I could have given in to my anxiety, “omg, what if I ask for more and they think I’m greedy.” However, I asked for more and ended up with $55,000. That’s $7,000 more per year! We can nearly max out our Roth IRAs for 2026 with that amount and earn ~$700K over 30 years! Do you see the problem now? Why on earth would I cut out Boba tea from my life, or stress out over 0.5% APY when larger levers exist! Archimedes said, “Give me a large enough lever, and I can move the world.” Let’s wrap up with one of the largest wealth-building “levers” of all time…skill acquisition.

A few months ago, one of our live show guests, a guy in his late 20s, pivoted from a low-paying job to making over $8K per month as a self-taught software engineer—doubling his income. Research shows that roles requiring digital or advanced technical skills pay ~6% more than similar roles without them. In-demand skills like AI or cybersecurity can command premiums of 9%+. It's NEVER too late to gain skills and unlock better roles, projects, pay, and optionality. Alternatively—or in addition to a career pivot—you can start a 5–9 (side hustle) with something you actually care about. Over time, you could make enough to leave your 9–5. That's exactly what I and many others have done.

While I’m all for being disciplined and practicing delayed gratification, cutting your favorite beverage won’t magically allow you to afford a home. It’ll just make you unhappy. Focus on the larger levers and find a balance between enjoying your life now and securing your future 💸🤓