Why do millionaires buy espresso machines? Because we can’t afford not to, says wealthy buddy Dave.
My buddy Dave became a multimillionaire in the dot-com days. We were best friends before he got rich, and we still are, so I see him often. It took him years of hard work to earn his “sudden” wealth, and he’s completely unchanged, except for his occasionally head-turning insights about money—and his brand-new espresso machine.
Dave and I always talked about money the way other guys talk about sports or cars. We compared salaries, investments, retirement plans and everything else, but without the headache-inducing one-upmanship men are prone to when revealing incomes. It’s even more fun to talk money with Dave these days; he’s the same unassuming guy, even while he’s operating on a higher plane of financial existence; all his numbers now have at least one more zero than mine.
At his house the other day, Dave surprised me by asking if I wanted a homemade latte. Dave hadn’t been much of a coffee drinker until he moved to Portland, a habit I’ve kidded him about. He’s succumbed wholeheartedly to the Northwest’s trademark elixir.
We went into his kitchen, where he proudly displayed his brand new, Swiss-made, fully automatic espresso machine, for which he’d slapped down a cool $945 at an online store called WholeLatteLove.com.
It must be nice to be able to afford a high-end, fully automatic espresso maker, I mused aloud. Dave’s response snapped me to attention.
“Actually, I can’t afford not to own one,” he said.
I thought he was joking, and asked what he meant.
“Think of it this way,” said Dave. “Do you and your wife drink at least one double latte each a day?”
“OK, consider this: One double latte costs three dollars at a coffee shop, so your outside coffee-drinking habit comes to six dollars a day for you and your wife. That’s $2,190 per year in after-tax dollars,” Dave extrapolated. “Assuming you’re in the 27 percent tax bracket, that means you have to earn $3,000 before taxes to pay for those lattes. That’s more than a month’s wages for a substitute teacher here in the state of Oregon.”
Dave’s last remark nearly made me gag—until recently, I had been considering a career change into education. Would I have to put in a full month of work just to keep my family in coffee for the year if I became a schoolteacher?
I envisioned myself dismally counting pennies onto the counter at Peet’s.
“But make coffee drinks yourself,” Dave went on, “and you save a bundle.”
He walked over to the gleaming machine and asked if I wanted a quadruple espresso with a brownie for dessert. He had to ask?
“You can buy a gallon of organic whole milk in Portland for $4.99,” Dave said, touching a button. The device whirred, hiccupped, ground a precise measure of chocolate-colored beans, then burped a few times as it forced creamy, deep-brown espresso through twin nozzles into a waiting cup.
Dave passed me the behemoth espresso and the promised brownie.
“At one cup of milk per latte per day, your cost of milk comes to only $20 per month,” he went on. “And coffee beans are cheap. This organic Italian espresso was $11 a pound, and I doubt we’ll go through two pounds in 30 days. But, to be conservative let’s say our total cost of goods is $45 a month, including cleaning tablets for the Jura. That’s one-fourth of the $180 you would spend at coffee shops. Plus, it’s all organic.”
Grabbing a calculator, I figured aloud that I could spend $1,000 on an espresso machine, recover the cost in the first year, and still come out nearly $700 ahead compared to buying lattes at retail.
“That’s right,” said Dave. “After running my own company, I can’t help calculating the cost of everything, including operating a household. Frankly, I simply cannot afford not to make my own lattes. Besides, it’s fun, the drinks are better, and I can treat my friends.”
We drank to that. Then it was back home to convince the wife that we, too, simply can’t afford not to become our own baristas.
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