Lambos & Lattes

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Changes are underway…

After polling readers, asking friends, and bothering my family about it, the new name of this email will be…

*DRUM ROLL

*Pops Champagne and throws hat as the flyover goes by!!

Content won’t be changing but Chump Change will serve as a fun name to reflect the light-hearted finance theme of this email. Expect a few design updates, but other than that your boy is still going to be behind the keyboard.

Onto today’s piece. 🤝

“As long as you’re going to be thinking, think big.” - D. Trump

In this piece we are going to explain the lambo vs latte effect. This is a term that I believe has been coined by one of my favorite productions, The Money Guy Show.

The details of each is different, but both can throw you finances for a loop.

Let’s take a look at each one.

This effect takes place when one gets caught up chasing the big purchases in life.

Think of the lambo effect as decisions that cost more than one week’s pay. These are big spending areas. For example, your monthly payment on a home, or what kind of private jet you decide to buy (manifesting it).

The latte factor is when one hurts their finances through a high volume of small purchases. We’ll call these anything less than what you earn in one week.

The problem here is not the individual cost of each action, but the total over a certain time.

When you hear that someone is struggling financially, it is likely because of the lambo effect. This area is the easiest for people to get in trouble because large financial decisions like what car you drive can cost one thousands of dollars a month.

In case you missed it, the lambo effect goes well with last week’s post “Expensive Games” where we broke down the importance of not spending money to show people that you have money.

Your mocha frape (insert other bs) with two pumps of vanilla everyday is an example of the latte effect. While these items may not be the main cause of one’s financial problems, they can DEFINITELY add up if not managed properly.

Subscriptions, eating out, and clothing purchases are all examples of “latte” decisions that when done here-and-there are fine, but can wreck your wallet when let to run free.

If you are in a bad place financially identify which of these effects is causing you to struggle. It might only be one, or you might find you made a bad lambo decision and way too may bad latte decisions as well.

If you are saving 25%+ of your income, have debts under control, and are funding your investment accounts, please feel free to go through the Starbucks drive-thru in your Lamborghini.

I’ll be tipping my hat as you burnout of the parking lot. ~ Cade

Cade's Finds

JEPI Covered Call ETF Explained - JEPI is the largest actively managed ETFs in 2023. It’s very popular with dividend investors, yet still not understood well. This was a helpful podcast discussing the pros/cons, and what investors should expect from this ETF.

Girdley’s World - A newsletter that I have been enjoying. Some of my recent favorites include How to Set Big Goals, and Why CEO’s Are Always The Last To Know. If you’d like to join me as a reader subscribe with one click by clicking here.

What’s a Reputation Worth? - A honest post by Jack Raines on the relationship and tradeoff between money and reputation. The article specifically targets Chamath Palihapitiya who made $750M from shady SPAC launches.

New trend, add all of your best positions to LinkedIn.

Speaking of Chamath, his meme game is usually weak. This one though…

Refer two friends and add to your money toolbox.

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.