Ramit Sethi: Not Being Frugal About Coffee Isn’t Stopping You From Becoming a Millionaire
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Josephine Nesbit
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Nicholas Morine
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Buying a coffee every morning isn’t going to hold you back financially, finance expert Ramit Sethi recently said.
According to Moneywise, a handful of finance experts have come out and said spending money on the little luxuries — like lattes and sandwiches — is one major reason Americans struggle with debt. For instance, Suze Orman told CNBC that spending money on expensive coffee amounts to “peeing $1 million down in the drain” in lost investments. Dave Ramsey’s company, Ramsey Solutions, also estimates the average consumer can save about $22,995 over 30 years by skipping the morning to-go coffee.
Sethi Takes on Kevin O’Leary
Entrepreneur Kevin O’Leary recently wrote on X, formerly known as Twitter, to “stop wasting money on $5.50 coffee and $15 sandwiches” and instead pack a sandwich.
Sethi responded, sparking debate in the comments.
“Kevin, tell them if it’s making your own coffee that led to your net worth,” he wrote.
In a follow-up post, Sethi claims that “frugality” isn’t what made the “Shark Tank” investor a millionaire. Moneywise pointed out that you’d have to skip 181,818 cups of coffee priced at $5.50 each to save $1 million.
Social Media Users Seem To Side With Sethi
Sethi isn’t the only one to come out and criticize high-profile finance gurus. Millions of millennial and Gen Z TikTokers have turned their back on Ramsey, saying self-care and $6 coffee is more important than his approach to debt and frugality. The trend has more than 66 million views under the hashtag “#daveramseywouldntapprove,” The Daily Mail reported.
Social media users point to inflation and college debt as proof his advice is outdated. Younger Americans also argue that treats, including the daily coffee, are essential for their mental health.
“I’d rather be caffeinated than depressed with $6,” Jarrod Benson, a 32-year-old comedian from Orlando, told Business Insider.
Sethi believes that a more practical approach to living a rich life is by building a budget. According to Moneywise, Sethi encourages people to create four broad baskets for all expenses. One basket is for fixed expenses such as rent and utilities, the second and third are for savings and investments and the fourth is for discretionary spending. Give each category a fixed percentage, such as 60% of income goes towards fixed costs, to create a simple budget.
Sethi says this is much more practical than tracking how much you save by skipping the morning coffee.
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