Does Drinking Coffee Make You Poor?

There’s a big debate around buying coffee. Skip the lattes and you’re a billionaire, or enjoy your Starbucks now because saving tiny amounts of money is irrelevant.

Both sides make pretty good arguments, however much of their information is incomplete or ignores more important factors. Case in point, this Reader’s Digest article highlighting the savings habits of ultra-rich people. In it, we see that Warren Buffett lives in a modest house he bought for $31,000. Meanwhile, the author forgets that Buffett owns many homes, some worth well over $10 million.

Because of this, today’s article takes a detailed look at when saving money works and when it’s detrimental.

The High Cost Of Being Frugal

Being a cheapskate can hurt you long-term. There are a lot of penny pinchers who end up screwing themselves in the long-run by being overly frugal.

Some examples:

• Buying an old, unreliable car that costs more in maintenance and repairs than something newer with a slightly higher price tag.
• Refusing to go out with friends or coworkers in hopes of saving money.
• Eating cheap, low quality food which leads to health problems.
• Never investing (for fear of losing money).