Your store-bought turkey and cheese sandwich washed down with a Starbucks latte will only taste like regret, based on The Shark Cat with Kevin O’Leary because the star.
People are burning a hole of their pockets by buying sandwiches and low on the approach to the office, the enterprise capitalist said in a Instagram video last week. Instead, these useful dollars could possibly be saved or invested.
“A coffee for five dollars and fifty cents. You go to work and spend fifteen dollars on a sandwich,” O’Leary said within the clip. “Are you an idiot?”
O’Leary argued that these $20 each day purchases could add up for many who have just change into financially stable.
“Most people, especially in big cities, are just starting out in their careers, earning their first $60,000, and spending about $15,000 a year on stupid stuff,” he added.
O’Leary’s argument is paying homage to that of luxury real estate developer Tim Gurner, who argues in 2017 that young people cannot afford to purchase their very own home because they waste their money on avocado toast and expensive drinks, resulting in a long-standing meme about this generation’s affinity for breakfast food.
“When I was trying to buy my first house, I didn’t buy a mashed avocado for $19 and four coffees for $4 each,” Gurner said. “We’re at a point now where the expectations of younger people are very, very high.”
The economics of avocado toast, exposed
Although O’Leary is adamant concerning the dangers of a day latte, there’s loads of evidence to suggest that buyers can have their coffee cake and eat it too. The avocado toast generation of Millennials and their cold brew-sipping counterparts of Generation Z are big winners within the economic recovery after the pandemic. Their wealth increased by 40% from 2019 to 2023, based on the Center for American Progress, a left-leaning think tank. Young persons are also getting higher mortgage offers than older generations: According to Freddie Mac, mortgage rates for Generation Z and Millennials average 4%, while for Baby Boomers they average 4.1%.
The spending habits of those younger generations have shown that financial security and snacking should not mutually exclusive. Young persons are very aware of monetary pressures, based on a July 2024 Bank of America study. report Of over 1,000 Gen Z adults surveyed, over 50% believed the high cost of living was their biggest financial hurdle stopping them from succeeding. The generation has turned to budgeting to get monetary savings.
“They are feeling the high cost of living,” said Holly O’Neill, president of retail banking at Bank of America, Assets in July. “They know they have to set a budget, and they know they have to find ways to save, and they’re looking at those budgets … to meet those priorities.”
But the cuts haven’t come on the expense of food and drinks. While young people have braced themselves for financial pressures, also they are more optimistic concerning the economy, based on a May 2024 survey. report by McKinsey & Company based on a survey of over 4,000 participants. Younger generations usually tend to spend selectively on non-essential items, especially when eating out. 38% of Generation Z and 41% of Millennials intend to spend money at restaurants, nightlife and bars.
But financial health aside, an additional coffee or a fast lunch out of the home won’t break the bank for young people, says Elizabeth Renter, senior economist at NerdWallet. told MarketplaceShe calculated that in a world where avocado toast costs $14 and a latte macchiato costs $4, someone who desires to make a 20% down payment on a $313,200 house would need to forgo 5,220 avocado toasts and 15,600 lattes.
“The whole idea that you could just give up avocado toast and suddenly have enough money to buy a house is very simplistic,” Renter said. “If your weekly latte makes you happy and you’re not in financial distress, then drink it.”
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