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Why 'Shark Tank' Investor Kevin O'Leary Refuses To Spend $2.50 On a Cup of Coffee (cnbc.com)
An anonymous reader shares a report: Kevin O'Leary has invested hundreds of thousands of dollars in small businesses over the course of his tenure as a star and investor on ABC's "Shark Tank." But there is one business to which he refuses to fork over his hard-earned dollars: coffee shops. "Do I pay $2.50 for a coffee? Never, never, never do I do that," O'Leary tells CNBC Make It. "That is such a waste of money for something that costs 20 cents. I never buy a frape-latte-blah-blah-blah-woof-woof-woof for $2.50." Instead, he makes it at home. "I drink coffee, one cup every morning," he explains. "It costs about 18 cents to make it, and I invest the rest." That idea -- saving small sums and investing continually -- is central to O'Leary's personal finance advice. "The truth is, there is a lot of crap you don't need," he explains.
The coffee shop explosion is one of the great rip-offs of our age
If everyone followed his advice our Clown World economy would collapse.
It only costs 18 cents if your time is worth nothing. Way faster to go out of your way and wait in line at SBUX. /s
the growth in cynicism and rebellion has not been without cause
And a pretty easily proven one. He's talking about $850 a year. That's not going to make or break anyone's investment portfolio. It's like that schmuck in Australia who told the young uns the could afford a house in Sydney if only they'd give up avocado toast. It's nonsense the aristocracy tells it's workers to excuse stagnant and falling wages. Don't fall for it.
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So I'm supposed to believe a guy that is worth more than $300 million never buys anything he doesn't need? Sounds legit.
There are lots of things that are cheaper at home. Drinking a beer at home is a lot cheaper than drinking one at the pub, for example. You're not just paying for the drink, you're paying for the use of a big space where you can talk to other people. The problem isn't $2.50 coffee (actually, I'd be astonished if I could buy coffee that cheap around here), it's buying $2.50 coffee every day. Even once a day each week, that's $50/month on coffee. Two coffees a day and it's $100/month. Give that up, and you can afford a nice holiday somewhere, or pay back your mortgage earlier.
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Reread, please. He says it costs HIM 18 cents to make.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
How is this News for Nerds? More importantly do we really want to take financial advise from this guy?
Rich people think the reason people are poor is because they spend little bits of money here and there. Budgeting is one issue with people but really its a lack of money. Also spending little bits of money is good for the economy.
His example is analogous to $100 HDMI cables, and the world is full of these examples. It's easy to laugh at someone when their choice is not your choice, but the fact is the world is run by parting fools and their money.
I just bought his book called "The cold hard truth about men, women and money". It is pretty good, and mostly is full of these kinds of ideas. I really think people just don't get personal finance at all, and don't realize these things are literally like death by a thousand cuts. Not that Kevin O'Leary is perfect, but at least it is written in language that is accessible to most people, and will probably get them worked up emotionally, and then on his side. The people who won't like it, is that group who thinks that people need to keep spending to keep everything running in the economy. If you know what I mean. Those who don't really want people saving money.
They both were locked into a serious battle in South Asian shampoo market. With all that might of P&G, HL was running circles around them
My niece is a big shot in that circle (now working for Estee Lauder India) she explained the basic difference. "There are women who can not afford shampoo. But once in a while something nice happens, and she feels great and feels like treating herself to luxury. That thirty cent sachet of shampoo is a luxury for her. She will never have enough to buy a whole bottle ever, and will balk at the cost of a bottle. But... on any given day there are about a million such women willing to buy a sachet of shampoo for 30 cents. I am selling 300K a day. 100 million dollars a year."
There are people for whom that 5$ coffee is a luxury they are treating themselves to. The American dream of owning a home and having a comfortable retirement is gone for them. They see themselves working till the day they are going to die. They see 80 year old grandmas trying to work as walmart greeters. From their perspective, "I have 5$ today, I am going to splurge!".
A country this great, this wealthy, with that much of despair among the young ...
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
If I would have just jerked off instead of renting hookers, I would have been a millionaire!
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
That's just the man's personality. As someone once said about writing code in a certain scripting language, there is more than one way to do it.
Paying $3 for a cup of coffee every morning for 40 years = $43,800
Paying 20 cents for a cup of coffee every morning for 40 years = $2,920
That's a difference of over $40 thousand dollars. It's a hell of a lot more than that if you took that money and invested it over a 40-year span.
This is advice. Financial advice. And the hipster masses perpetually carrying around a caramel-drizzled fuckachino bitching about always being broke would probably be wise to listen.
Paying 20 cents for a cup of coffee every morning for 40 years = $2,920
Having a company-stocked Keurig? Priceless. Am I the only one with a coffee maker at work? Even before I took this job with the stocked Keurig, we had a coffee maker with an honor-system can for buying coffee.
He's getting rather old, but he's a good mouse.
OK But you can apply this to any form of entertainment. You could always be saving money. It's always cheaper to cook at home. It's always cheaper to buy a six pack of beer than meet friends at a bar. It's cheaper to watch movies that come over basic television than to than buy/rent/ or go to the movies. It's cheaper to sit in your room and stare at he wall than to take a vacation. Yeah, so what?
Also, the guy is disingenuously muddying the idea of paying for a service and paying for a more expensive version of the product.: (frape-latte-blah-blah-blah-woof-woof-woof). OK you like black coffee better, but some people are willing to pay for something tastes better. It would be like telling people they are wasting money buying a craft beer instead of the cheapest forty. Again, yeah, so what?
This is a really bad way to view things.
I've had people tell me the same thing about why they pay for certain services. Say I make $50/hour. I can paint my own room or pay someone $15/hour to do it. (we'll assume supplies are a fixed price either way, so the only difference is the hourly rate). Let's say it takes 4 hours. Some would say that paying someone $60 to do the job make sense, because in that time I could earn $200, putting me $140 ahead. But that's not necessarily the case. For me to earn that $200, I actually have to be working, not painting my room. So paying someone to do it actually puts me $60 behind.
Same thing for anyone. If he's sitting at the table reading the paper while the coffee brews, he's not reducing his earnings. If he's paying someone to do it for him, he's still not earning anything, and he's paying out of pocket more than it would cost him to do it himself.
I volunteered at a local non-profit coffee shop. All volunteer labor, costs passed on to the customer.
Across the board the prices were around 30% - 60% of Starbucks. I was actually surprised it was that high and doesn't mesh with the idea that Starbucks makes 95% profit. If we paid everyone, the prices wouldn't have been much better than Starbucks (maybe worse), and that's still with no profit.
Capital costs represent a very large percentage of costs passed on to consumers, as usual with any restaurant.
I found a better breakdown of coffee shop costs, which concludes:
What’s the lesson here? Certainly it’s that you’re paying for a lot more than the coffee when you choose to buy from a coffee shop. . . .
But, when you buy a Cappuccino Grande, you’re mostly paying for the privilege of enjoying it in a coffee shop.
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
Cause for many of us Gen-X'ers, investments haven't even broken even. Heck, we're going to be the first generation to pay more into Social Security than we'll get back.
That about sums up investing for Gen-X'ers.
/thread
This is advice. Financial advice
You want advice. Live under a bridge. Eat nothing but potatoes, don't ever pay someone for something you can do yourself regardless of how long it takes you. Then you will truly be saving money.
It's a fucked life, but hey, every dollar right?
how much more do you need? Being obsessed with investing the $2 you saved on a coffee is insane.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
This is just an illustration of how trickle down economics is utter bullshit. Of course the past 30 years of economic stagnation for the formerly middle class in the USA has also clearly demonstrated that fact. Trickle down is a front for wealth concentration at the top and extraction from the bottom. The repugnant tax cut the repugnicans are currently attempting to cram through congress is the latest escalation in the economic slaughter being visited upon us by the 1%.
Only I can judge you.
Worse yet, there are people who will regularly leave their home/workplace and drive somewhere for the sole purpose of getting a cup of coffee and bringing it back to where they were. Sometimes they'll do this multiple times per day!
Log in or piss off.
Your workplace doesn't supply the coffee for free to you? What kind of third-world hellhole do you live in?
Eat the rich.
Yep. I'm surprised at how few people see it this way. Or maybe I'm surprised at how many people have access to infinite amounts of overtime or other hourly work, and when presented with a choice between doing other things or just working more and hiring a service, go for the service.
That said, it's not always unwise to pay for the service. Unpaid personal time has a value, too. Hiring someone to paint your room so that you can be out with friends or family, having fun, or just getting rest, may be a perfectly sensible choice. It varies a lot based on time, income, preferences, and circumstance.
For instance, I'll drink the free coffee at work most days, and usually make it at home on weekends. But I'll splurge on a fancy latte maybe once a month just because I want something different. And if I'm traveling, well, I'll buy whatever's around, but tend to pay a premium because a lot of times the basic stuff has been sitting around for hours getting burnt, which I find unappealing.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
There is such a thing as being so cheap that it is not financially sound. Having clean clothes and showering every day gives you a massive increase in earning potential. Living near a major city provides access to more job opportunities. Having a balanced diet prevents costly health problems in the future. IMO, the most financially efficient lifestyle is owning a home in a city, but renting out some rooms to cover the costs. If you own a three bedroom house and you're renting out two of the rooms, you should be close to break-even. With none of the downsides of living under a bridge.