She reached Helena’s Coffee just as Henry was walking out the door.
“Well, well,” he said. “And to what do I owe this unexpected honor?”
“I – have – a question,” said Zoey, still winded from her six-block jog.
“Of course,” he said. He looked back at the door behind him, then beyond Zoey toward the corner she’d just crossed, then back at her. “Join me in a coffee?”
Zoey was about to say Please and follow him back into Helena’s—but instead he set off at a brisk pace down the street. She followed. When he reached the corner he turned, then stopped at the first door and opened it for her.
They were at a Starbucks.
Zoey hesitated and looked at him. Really?
“After you,” he said with a smile.
They stepped inside and over to the order counter.
“Tall double-shot latte, please,” said Zoey. Then added, “Can you make that half decaf?”
“A hot tea, if you would,” said Henry. “English Breakfast.”
He paid for his tea and Zoey’s latte (she objected, but he insisted; old-school, she thought with a smile) and they took a small table in back.
“I don’t know,” said Zoey. “Sitting with you, at a Starbucks. Seems weird. Sacrilegious.”
Henry laughed. “Does it?”
“Well,” she said, sipping at her latte. “I suppose it’s good to know your enemy.” She tapped her paper coffee cup against his paper teacup in a soundless toast. “Here’s to reconnaissance in the belly of the beast.”
Henry gave a cryptic smile. He dipped his tea bag in the boiling hot water a few times.
“I have a confession,” said Zoey. “Yesterday, before I learned that you own your coffee shop, I was tempted to ask you, ‘How on earth does a barista know the “secrets of financial freedom”?’ ”
Henry squeezed the excess water out of the tea bag and set it to the side, then looked at Zoey with a serious expression. “You mean, if all this ‘pay yourself first’ stuff actually worked, what is a guy like me doing in his seventies, still working retail?”
Zoey blushed and looked down. “No, I mean . . .” She looked up at him again and gave a rueful smile. “Yes, I guess. More or less.”
Henry grinned, then blew on his tea to cool it. “I should give you a little background. When I started Helena’s, more than thirty years ago, I had all sorts of friends in this neighborhood. They’re all gone now . . .”
“I’m so sorry,” Zoey began, but Henry just chuckled.
“No, no,” he said, “they didn’t die. They moved. Or went out of business. You know why I’m still here? Why my business survived?”
“Because the coffee is so good?” said Zoey. “No, not just that; it’s the ambience.” When Henry smiled that cryptic smile again, she added, “Um, a loyal clientele who loves you?”
Henry laughed. “That’s very nice, thank you. But no. I’m still here because I bought the building.”
“You bought the building,” Zoey repeated.
“And the building next door,” Henry added. “And then a few more down the street.”
Zoey was at this point stunned into speechlessness. She certainly was revising her picture of “the eccentric barista,” wasn’t she!
“There are basically two kinds of people, Zoey. Everyone spends money every day, and as they do they’re building wealth. Everyone builds wealth. The only question is: For whom?
“You mentioned that you rent. When you rent, you are letting life happen to you. When you own, you take a hand in directing the events of your life. When you own your home, you’re taking ownership of your life. Or, in my case, of my business.
“For example, Starbucks. When they showed up, everyone thought it was a joke and wouldn’t last. Fancy, expensive coffee? Ha. But it lasted, all right, and it grew. Soon the other neighborhood coffee shops were losing business. All my friends got upset. They tried to fight it. They lobbied against it. Campaigned against it.”
He paused. Zoey knew a setup for a punch line when she heard it. “And you?” she prompted.
Henry smiled. “I bought stock.”
She put her coffee down and stared at him. “Wait. Stock in Starbucks? You?”
“Me. While everyone else was either coming in to buy their coffee, or staying away to boycott their coffee, I bought stock in their company. Taking ownership of the situation, you could say.”
“Stock in Starbucks,” Zoey repeated.
Henry leaned in closer and tapped the table with his forefinger to punctuate his next point. “If you had bought, say, $1,000 worth of Starbucks stock when it went public in 1992, you know what it would be worth today?”
“No idea,” said Zoey.
“Nearly a quarter of a million.”
“Wow,” she said. “You really are consorting with the enemy.”
Henry laughed again. “Well, you could see it that way. Here’s how I see it. Every time someone comes in here and buys a cup of coffee, two things happen. They’re renting a tiny piece of this business. A coffee cup’s worth. And, since I own a piece of Starbucks, I’m getting a little bit richer.”
Zoey thought about what he’d said. “Two kinds of people.”
Henry nodded. “Exactly. Renters and owners. And the beauty of it is, you get to choose which, anytime you want.
“When you pay yourself first and put that dollar—or ten dollars, or twenty-five dollars—toward buying a home, or a business, or stock in a business, or investing in your own future in any way, you are taking ownership of your life.
“Most people lease and loan their lives. Pay yourself first and make it automatic so that you’ll keep on doing it, month after month, year in and year out, and you own your life.”
“Or in your case,” added Zoey, “your business.”
He nodded. “When I bought that building, I saw it as an investment in my neighborhood, as well as in my business. In the years since, it’s gone up well over $1 million in value. But here’s my point: How did I buy that building in the first place? Because I can promise you, I did not win the lottery, or write a hit song. Or find buried treasure in my backyard.”
“And you didn’t bump off your rich great-aunt?”
Henry smiled. “No, no rich great-aunt to dispatch. No, Zoey, I built it, over time, by paying myself first.”
Zoey looked thoughtful. Henry could see that something was bothering her.
“Which brings us to your question,” he prompted.
“Yes.” She hesitated. “I was looking at that chart again. The one that starts with $25 a day that I’m supposedly putting into that savings account, and that adds up to more than $3 million in forty years? Where is that $25 supposed to come from?”
“Ah,” said Henry. He blew on his tea again, then took a careful sip.
“You say making more income isn’t the answer,” Zoey went on. “But then you say we’re supposed to peel off an extra 10 percent of my paycheck. More, actually, if you really mean that one-hour-a-day thing, because one-eighth is actually more than twelve percent. Which is all great in theory—but how’s that supposed to work when I’m already stretched to the limit?”
Henry nodded. “This, Zoey,” he said, “this is where the latte factor comes in.”
Ah. Finally, they were going to talk about that latte factor! Without realizing she was doing it, Zoey sat up straight in her chair.
Henry reached into his pocket, pulled out a five-dollar bill, and set it on the table between them. “Remember this?”
“Five dollars a day,” she said. “The miracle of compound interest.”
“Exactly,” said Henry. “Now let’s apply that same idea to your coffee.”
Zoey looked at the half-decaf latte in her hand, then back at him. “My coffee.”
“Your coffee,” said Henry. “That cost, what, four bucks?”
“Four fifty,” said Zoey.
“Okay. Seems like an innocent, entirely insignificant thing, right? But watch, when the power of compounding kicks in. Let’s say you diverted that ‘insignificant’ four fifty into a Zoey’s Photograph Account. Five days a week, for a year. Without even factoring in any interest at all, in one year you’d have . . . well”—he cocked his head, calculating—“you’d have nearly $1,200.” He looked at her. “Do you remember what the price tag was on your print?”
She did. It was exactly $1,200.
Zoey stared at her latte, then back at Henry again. When she spoke, her voice was husky with emotion. “You’re saying in a year’s time I could buy that print—with this latte?”
Henry took another sip of tea.
“Whoa,” she said. “That’s one strong cup of coffee.”
He chuckled. “And that, Zoey, is the latte factor.”
“The miracle of compounding coffee,” she murmured.
He raised his tea in another toast, tapping it lightly against her latte. “Here’s to your print of Mykonos, gracing your living room wall.”
Zoey sat for a moment, thinking. Then she said, “So, goodbye, morning latte?”
Henry’s smile faded. He set his tea down, put both palms on the table, and looked at her. “Zoey,” he said. “Please don’t misunderstand what I’m saying. No, I’m not saying you have to stop drinking lattes. It’s not about your coffee. The latte factor is a metaphor. It could be anything you spend extra money on that you could happily do without. Cigarettes. A candy bar. Fancy cocktails. Anything.
“The latte factor isn’t about being a penny-pincher or denying yourself. It’s about getting clear on what matters. It’s about the little daily extravagances and frivolities, whatever they may be—the five, ten, twenty dollars a day that you could just as easily redirect toward your own future. From spending on yourself to paying yourself first. It’s about giving up something small to get up to something big.
“The point isn’t that you can’t spend money. Of course you can, and you should. Life is to enjoy. You can buy yourself whatever things you truly want. A nice outfit, a dinner out, a show in town. As long as you ‘pay yourself first.’ ”
Zoey shook her head slowly. She was still looking at the coffee cup in her hand and picturing that big gorgeous framed print on the coffee shop wall, trying to connect the two in her mind.
“Here,” said Henry. “Would you do something for me? Just walk me through your day. A typical day. Today, for instance. What did you do, first thing upon leaving your apartment?”
“Got a double shot at Helena’s,” she said softly. “My $1,200 latte.”
“And?” He pulled out his drafting pencil and made a brief notation on a napkin. “Just the latte, or anything with it?”
She arched an eyebrow at him. “No, not just the latte. I also get a muffin. Carrot cake–raisin, usually, or oat-apple. Whatever looks most nourishing. Always delicious, by the way.”
“At two seventy-five, if I recall.” He jotted down another number on the napkin. “And we are grateful for your patronage. Then what?”
“You mean, what’s the next thing I spend money on?”
“Please,” he said.
“Well, the train. That’s a few dollars. Also two seventy-five, to be exact.”
Henry waved one hand. “Transportation. Not really negotiable. What next?”
Zoey thought back to her morning. “Sometimes I take a break at about ten and go pick up an organic juice at the Juice Press downstairs. Fresh squeezed.”
“And that costs . . . ?”
“Seven dollars.”
“Seven dollars,” Henry repeated, jotting it down. “What next?”
“Well, there’s lunch. My boss brings her own from home, but I buy mine at the company cafeteria. That’s another . . .” She scrunched up her face, trying to remember what she typically spent on lunch. “Another fourteen dollars.”
Henry looked up from his jotted notes.
“And after lunch? Anything?”
“No, that’s it.” Zoey thought for a moment. “Oh, wait. Plus a bottled water. A dollar fifty.”
Henry’s eyebrows went up. “Wow,” he said. “Pretty highbrow water. Okay.” He wrote once again on the napkin, then turned it around so Zoey could see the page. “Let’s see what we have so far.”
|
morning latte |
$4.50 |
|
|
muffin |
$2.75 |
|
|
juice |
$7.00 |
|
|
lunch |
$14.00 |
|
|
bottled water |
$1.50 |
|
|
Total |
$29.75 |
|
“Do you remember the figure it would take to pay yourself your first hour’s worth?” said Henry. “The one that would retire you with more than $3 million in the bank?”
“Twenty-five dollars,” murmured Zoey.
Henry nodded. “Well, you’re already well past that. And we haven’t gotten to your afternoon half decaf yet.” He nodded at the latte in front of her. “You know, the one that buys your dockside view of Mykonos.”
She stared at the napkin.
He picked it up and handed it to her.
“Your latte factor,” he said. “Not that that’s all fluff. After all, you have to eat. But if you, say, made coffee at home in the morning, brought a piece of fruit with you? Maybe even brought a lunch? If you could redirect even half that daily tab into a retirement account, that simple shift in habits alone would build you one serious nest egg.”
His words reminded Zoey of something Barbara had said a few hours ago.
The solution to your money problems isn’t more money; it’s new habits.
She took the napkin and stuck it in a pocket. “So I’m supposed to, what, keep track of every little expense? Pore over my list every night to see where I can cut back?” To Zoey, this sounded like the worst form of torture.
“No, no, no,” said Henry. “Not at all! The point is not to obsess or keep track of every dollar you spend forevermore. Remember: budgets don’t work. No, the point of the exercise is simply to give yourself a little evidence—to show you that you already earn enough right now to build wealth.”
She looked up at him.
“You mean, I’m richer than I think,” she said.
“You’re richer than you think,” he echoed. “Which is true, by the way. You, Zoey, earn enough, right now, to become financially independent. It’s just that, like most people, you’re letting it drain away as quickly as you earn it. It’s like filling a bathtub with the drain wide-open and wondering why it never gets full enough to take a nice hot bath. We dribble away what should be the seeds of a fortune on little things that don’t matter, without ever giving it much thought. Grabbing all your coffee out, when you could as easily make some at home. Going out to lunch every day. Bottled water. Extra cable channels we don’t watch. New clothes filling our closets that we hardly ever wear. Late charges that could just as easily have been avoided.
“It’s not about depriving or punishing yourself. It’s about shifting your everyday habits, just a little.
“And with that little shift, changing your destiny.”
That night, after a dinner of leftover pizza and a fresh Greek salad from Luigi’s, Zoey stood in her kitchenette, staring at her coffeemaker, a little espresso machine Jeffrey had gotten her for her last birthday. She had hardly ever used it. But she could. Right?
What about at work? Could she drink the free coffee from the machine there, the one with all the different types of coffee blends? She didn’t see why not.
And lunch? She thought about Barbara’s old lacquer lunch box and sighed. What would Zoey save if she brought her lunch to work? The idea didn’t thrill her. What would she make, peanut butter and jelly sandwiches?
“Ha-ha,” she said to her tiny apartment.
She glanced around at the television. How much did she and her roommate actually spend on those cable channels they hardly ever watched? What was hanging in her closet that she rarely wore? What other junk was piled in there? How much of it had she put on credit cards? How much interest had stacked up on those cards? And if she didn’t make every single payment on time (which she did not), then just what were the late fees?
Zoey groaned. She didn’t want to think about how much everything actually cost. She tilted her head back and spoke out loud to the ceiling. “Could someone else figure this all out for me, please?” Ha-ha again. Myth #3 in action.
She pulled out the Starbucks napkin she had stuffed in her pocket, smoothed it out on the little counter, and looked at the total at the bottom of the column of numbers.
$29.75
She couldn’t help being curious about just what that would work out to.
She dragged her laptop out of her bag, set it up on the counter, and opened it. She found a long-term interest calculator online that allowed her to tally up what that daily expenditure would add up to, five days a week times fifty-two weeks, deposited into a pre-tax account earning 10 percent annual interest over forty years. Rounding up her daily latte factor total by twenty-five cents to get an even thirty dollars, she entered the numbers, then clicked on CALCULATE.
And sat back, stunned.
She ran the numbers a second time. And a third.
$4,110,652
More than four million dollars.
“It’s not real,” she murmured. It just didn’t seem possible.
She heard Jeffrey’s voice in her head: Where are you gonna earn 10 percent? Henry had explained that. But still . . . what if Jeffrey was right?
She ran the numbers once more, this time lowering the interest rate from 10 to 7 percent.
$1,706,129
What if even that was too optimistic? She ran it once more, this time at only 5 percent.
$991,913
She stared at the screen, still not believing it. Even at 5 percent, it still came to nearly $1 million.
She closed her laptop and tried to picture herself fixing a meal and packing a lunch box every morning before work. Brewing coffee on the thirty-third floor of One World Trade. Could she really “divert” her lunch and double-shot latte and the rest into a rich retirement?
She gave her head a shake, as if to clear out the nonsense.
She thought of her mother laughing and saying, I can’t even make frosting! Her mother’s voice over the phone: Oh, Zee, be happy with what you have.
She slipped her laptop back into her bag on the floor.
It occurred to her that she’d been approaching her running conversation with Henry as if it were an article for her magazine. Looking for the big picture, the arc of the narrative. She sighed. That was exactly what this all felt like. An article she was editing. Someone else’s thoughts, someone else’s adventures, someone else’s journey.
Someone else’s life. Not her own.
Her phone buzzed. A text, from Jessica:
Tomorrow: Friday. The job offer deadline. Drinks with Jessica. A thumbs-up and high-fives all around to celebrate her new job.
The phone buzzed a second time.
BTW, did U talk to the agency yet? Tell me U took the job! :-) :-)
Zoey stared at the little screen for what felt like an hour. Then she gingerly picked it up and texted back:
On 4 tomorrow! :-)
She put the phone down again, got up, brushed her teeth, and got ready for bed, where she lay on her back, staring at the ceiling.
She did not feel :-)
No, she thought, not :-) at all. She wasn’t sure exactly why, but right now she felt decidedly :-(