The Latte Factor

B”H

I’m going to push off April’s Reading List for a few more days, and talk to you about a book that I just read, last week, on May 8th and 9th, specifically, because I don’t want you to wait till May’s Reading List to hear about it. It’s called The Latte Factor by renowened author and financial expert David Bach. Here’s why every woman I know should read it (and that includes you).

1- It’s short. You can literally read it in one sitting and learn the most fundamental aspects of getting your financial life in order. Quick and to the point!

2- It’s not a finance book. It’s a fiction book. So for all of you intimidated by long prescriptive financial books, here’s a palatable way to get all the information you need through a character’s story.

And if you are a millennial or even a “Gen X’er” like myself who has been in the professional world, I can guarantee you that you will relate to this character. I lived in New York City and Miami most of my twenties, working in  lucrative jobs, yet I was exactly like Zoey, and so were most of my friends. Mind you, I worked in the financial services industry myself! The irony does not escape me, ladies.

3- Your mother is not telling you to read it. My mother mailed me every single David Bach book during my twenties – not just once, but twice. I’m not kidding! Ask me how many times I read them? ZERO!!! I was too busy, just like Zoey (the main character in the book) and almost every other twenty something I knew then!

When did I pick up David Bach’s books? When I was in my late thirties, married and with children, and I looked at my financial situation and said, “wait, is it possible that I should have learned something that’s in these books, a decade ago!?” The pages had turned amber yellow. At that point I had to go out and buy the updated editions, obviously.

First of all, thanks Mom! You totally knew best! And to you, lets be real… you’re probably not going to listen to Mom, and her list of “boring” finance books. So, let me tell you that  The Latte Factor is the book for you… short, to the point, and with all the basic information you need to know weaved into one character who is pretty much like you!

Now, on a separate note, I want to comment on the fact that one of the female leading experts in the Financial Services industry, Sallie Krawcheck, came out with a very harsh criticism of The Latte Factor which you can read here. While I like Mrs. Krawcheck’s work, here’s why I disagree with her comments:

First of all, it seems to me that Mrs. Krawcheck didn’t read the book when she wrote this.

True, the financial services industry has been predominantly dominated by men and the boys’ club phenomenon is a real one and it does affect women in many regards… in terms of how comfortable we are asking questions, in terms of how the financial information is delivered (hello, crazy jargon that no one understands and intimidating guys behind big mahogany desks telling us what to do with our money… in well… crazy jargon that no one understands), the absurd and very real wage gap problem, and more. All of these are real issues and there’s much improvement to be made in the industry and in corporate America as a whole. So much work.

But, just cuz it’s a boys’ club does not mean that every single man out there in the industry is out to patronize women. And when there are men, such as David Bach, changing the norm, leading the path to help women gain financial literacy and empower them around their financial lives, shouldn’t we say, Thank You!?

Let me say it for all other women out there, Thank You!

Our Sages say in Ethics of Our Fathers Chapter 4:

“Who is wise? One who learns from every man.”

Why can’t I, as a woman, learn from David Bach? Why is it considered patronizing if David Bach points out that we have myriad of “latte factors,” or money leaks, which had we more clarity and honesty around our financial lives, we would stop immediately? If we treated our money with honesty, clarity, and awareness, we would re-channel those financial resources elsewhere. Why is a man telling us this patronizing? Especially, if it’s true!

How many manicures, waxing sessions, drinks with friends (hello, you don’t even like alcohol), would you forgo if you realized – with honesty, clarity and full awareness – how that money could better serve YOU? Nobody says you need to forgo all of it? The message is rather, be intentional with your money and take a close, honest look. Your latte factor might be costing you the life of your dreams – a life aligned with your real values. That is, the Opportunity Cost of that “Latte” might be quite high! Why is it ok for a woman to point out this flaw in so many of us, but not a man?

Additionally, why is it patronizing for a man to tell us that we women tend to think “Prince Charming” (or some equivalent of Prince Charming, be it Mom, Dad, our great aunt) is coming to take care of our finances? Again, especially, when it’s true!? Sorry ladies, unless you grew up under a rock, you’ve been fed this myth to a certain extent (probably a large extent). So what if a man has to tell us to wake up! By the way, Barbara Stanny in one of her best books ever, Prince Charming Isn’t Coming, already told us. But, we can use the reminder. You may want to pick up her book too while you’re at it.

Aditionally, I’m not sure why Mrs. Krawcheck dismisses the stock market gains, since she works in the industry. Last time I checked the stock market yields an average 10% gain over the long term. You don’t believe it, ok, so say 8%. I’m not going to do the math here for you of what that could do for your future if you forgo at least some of those “lattes” and invested that money early on in your life. Just go read The Latte Factor by the pool, and thank me later!

Finally, ladies, we don’t have to be angry to get what we want and the article criticizing The Latte Factor sounds pretty angry. What Mrs. Krawcheck wants are real changes and those are very needed and good! She’s 100% right on that front. We just don’t need to be angry and bitter in order to achieve those.

And now, if you’ll excuse me, I’m headed to tell my teen age son and pre-teen daughter that they should read The Latte Factor :-) Wish me luck!

P.S.

Other titles by David Bach that I recommend are: The Automatic Millionaire and Smart Women Finish Rich

Related Post:

Ten Steps to Reduce Financial Anxiety and Feel Empowered

Related Podcast:

Episode 4: Barbara Stanny, Best Selling Author & Money Coach

Episode 83: Ashley Feinstein Gerstley, The Fiscal Femme

Episode 33: Demystifying Investing with Debbie Sassen

Episode 96: Bari Tessler, Financial Therapist & Author of The Art of Money