The Real Cost of Your $7 Daily Coffee Habit

How much should you be making in order to buy a $7 coffee every day and not really have it matter?

How much should you be making in order to buy a $7 coffee every day and not really have it matter? $7 a day is about $2,555 per year. And a common finance rule of thumb is that an expense can feel negligible when it's less than 1% of your gross income. There is a little bit of a flaw in this rule, which I will explain, but for it to be less than 1% of your gross income, you should be making around $255,000 a year in order to basically comfortably afford this and not have it matter at all. The flaw is that you can take 2,555 dol per year and you could invest it into the stock market. And so there is opportunity cost there. Your $2,555 every year, compounded over 30 years in the S&P 500, will yield you about $312,593. That means you're not throwing away $2,555 a year. You're actually throwing away the potential $312,000 of future wealth. And that will change the math. In order to make that amount feel negligible, you would want your net worth to be growing so much. That $312,000, that's just a drop in the bucket that. So in my opinion, I think you would probably be building towards a 10 to 20 to $30 million net worth. So to buy a coffee every day and not have it really financially matter, you should be making around 255k per year, have a net worth trending towards 10 to 30 million dollars, or perhaps your hourly rate is just really high, then it might be worth it to you.