The Myth of the Myth of the Latte Millionaire

In 1999, David Bach popularized the idea of a Latte Millionaire: someone who stops making a small luxury purchase, and thanks to the magic of compound interest, later finds themselves a million dollars richer. As he asked in 1999, “Are you latte-ing away your financial future?”

Modeling the problem as a geometric series, we get that $5, saved each day for 50 years with a 8% growth rate (10% less 2% inflation), does indeed result in 1.05 million dollars.

Since then, the idea has come under repeated scrutiny. The Guardian calls it “a nice fairy tale… also not true”. Slate denounces that it “wasn’t true. It didn’t work mathematically”. Eater sarcastically writes “rid yourself of all material delights, you piece of garbage”. Most substantially, there are three primary objections:

  1. It doesn’t work out mathematically, the model is wrong
  2. It doesn’t work out politically, we’re blaming poor people for luxury spending instead of addressing the real issues of poverty
  3. It doesn’t work out behaviorally, if you don’t buy a latte, you’ll feel the extra money burning a hole in your pocket and buy something else later

I actually don’t disagree at all. A Starbucks latte is only $2.95, and S&P returns are around 9.81%, so 7.8% less inflation. That gets us to $577,000, still pretty good, but not quite an even million. Bach’s claim is also outdated. A million in 1999 would be 1.64 million today, so the claim is exaggerated by about a factor of 3.

The critics are right politically as well. Decades of personal finance advice have pinned poverty on the poor, shaming them for improper retirement savings and irresponsible personal finance. But it’s too easy to use that as an excuse for poor economic policy and fail to fix the underlying conditions that allow poverty to exist at all.

Finally, I’m sympathetic to the view that people do tend to squander extra change. If not a latte, then for a beer after work.

…and yet, it’s dangerous to lean too heavily into this kind of thinking.

Sure it’s not a million, but $577,000 is still pretty good. Maybe a latte wasn’t the right metaphor, but many of us do have unnecessary luxury purchases. Sometimes I take an Uber instead of the bus, or buy too much produce and have to throw it out. I don’t know how much it all adds up to, but I wouldn’t be surprised if I was wasting more than $3/day on purchases that don’t really contribute to my happiness.

While it’s true that we need better economic policy, the view that people can’t take responsibility and can’t be taught to make better decisions is infantilizing. Yes, housing, healthcare and education costs have skyrocketed, that still doesn’t make you helpless in the face of macroeconomic trends.

In 2012, Derek Thompson reported that “Households earning less than $13,000 a year spend a shocking 9% of their money on lottery tickets”. Overall, a 2018 study found that “35% of lottery players had incomes below $40,000”. Another survey finds that consumers making under $20,000 spend on average 1.6% of their pre-tax income on alcohol.

You might object that this discussion is equally infantilizing. Isn’t it wrong to police the consumption of the very poor? Isn’t it wrong to suggest that they don’t also merit hope, and wonder, and nice things? That’s true, and for what it’s worth, I would also berate a wealthy friend for buying lottery tickets, but I’m desperately hoping for the tiniest bit of nuance here. It is both possible to argue that policies hurt poor people, and to acknowledge that people behave sub-optimally. As Tyler Cowen once wrote:

People who see a political war against the interests of the poor and thus who are reluctant to present or digest analyses which blame some of the problems of the poor on…the poor themselves. (Try bringing up “predatory borrowing” in any discussion of “predatory lending” and see what happens.) There’s simply an urgent feeling that any negative or pessimistic or undeserving view of the poor needs to be countered.

Actually, to be even more clear, none of this is meant as a negative view of the poor. It’s just a negative view of people. According to that same survey, wealthy people spend much more on alcohol than the poor! Not as a percentage of income, but in absolute terms, it’s still bad.

Finally, I just don’t really buy the behavioral explanation. People are capable of change, as the countess anecdotes on various personal finance subreddits and legions of Mr. Money Mustache followers suggest. There’s no reason excessive un-frugality has to be the norm.

For that matter, the objection is particularly ridiculous when it comes to coffee, which as you might remember, is literally a habit-forming dependency-inducing psychoactive drug. That’s not to scare you off from drugs, it’s just to say: If there is a purchase which, although unnecessary, repeatedly brings consumers back time and again, coffee is a pretty likely candidate.

So enjoy your latte if you want, but consider doing the math too.

The Most Interesting Generation

Via Daniel Frank, The Art of Manliness asks, is this the most boring generation? [0]

I hardly need to summarize the argument. Millennials are too busy “adulting” to actually be adults. They’re lazy and sheltered, living out a prolonged adolescence. You’ve heard all this before. If not from reading The Coddling of the American Mind or The Vanishing American Adult, then from reading the op-ed and tweets of people who have.

Though more recently, the idea has morphed. After a few years of pushback, we’ve come to understand the plight of millennials not as a character flaw, but as the result of intergenerational warfare.

It’s not that Millennials are delaying marriage because they want to, it’s just that they can’t afford it. They’re more educated than ever, it’s just that the goal posts have moved. In a series of increasingly savage tweets and memes, you’ll hear that when the Boomers went to college, it cost at most $17.42 a semester and the median summer job could pay off a mortgage in 6 months top. In this view, Millennials are stuck paying for the Boomers’ fiscal and environmental irresponsibility, while also subjected to massive wage theft through the Social Security ponzi scheme.

Fine then, The AoM seems to concede, it’s not that millennials are lazy, they’re just boring. The least interesting generation. It’s me, I suck. We suck. You see, I’m also a millennial, and I hate it. Or in the author’s own words:

So, no, in observing the comparative dullness of the modern generation’s life stories, the intent is not to be accusative, but simply descriptive. To explain some cultural phenomena and individual feelings that many have experienced but been unable to trace or articulate.

For one thing, it helps put a finger on a sense of real-if-hard-to-admit deprecation and longing that many of us Millennials experience. We may not feel that the criticism over things like spending too much on avocado toast and lattes is justified, but, in quiet moments alone, we do feel a sense that something in our cohort is lacking.

Before we get into it, you might ask, is this even worth talking about anymore?

On one hand, the conversation will soon be moot. The Boomers will die off, GenZ will become the new target of declinist paranoia and unjustifiable nostalgia. The question of millennials will fade into non-existence as they take on the role of default backdrop generation.

On the other hand, the trends also mean this is our last chance to provide a definitive answer. The final shots fired in an ending war, a desperate attempt to get in one good blow before the peace treaty is signed. In demographic terms, that short window of opportunity might be a 10 year event, and with the pending climate disaster, pending AI transformation, and pending civilizational collapse right ahead of us, it’s going to be a very important 10 years.

So fine, let’s do this one more time.

AoM opens:

Before Steve McQueen’s 18th birthday, he had worked on a farm, joined a circus, sold pens at a traveling carnival, hitchhiked and rode the rails across the country, worked as a lumberjack in Canada, labored on a chain gang in the Deep South (punishment for the crime of vagrancy), served a short (and illegal — he was underage) stint in the Merchant Marine, and joined the Marine Corps for a three-year enlistment.

This is followed by a litany of equally interesting anecdotes. Did you know that before playing James Bond, Sean Connery was a milkman and a truck driver? (Not to mention a “laborer”, whatever that is.) How quaint! How fun! Ralph Ellison? Now famed author of the Invisible Man? He was once a shoeshine boy. Not to mention a waiter, short-order cook, clerk, paperboy, and janitor. What about Ernest Hemingway? A farmhand at 15.

As AoM concludes:

​​Today, the situation is much the reverse. It is very rare to find an individual — whether they’re hugely successful or just an average joe — who has even a modestly interesting background, much less a McQueen-esque one.

Seriously? You can’t find someone who’s been in the milirary, done manual labor and gone to jail? 9% of U.S. adults are veterans, 11% are convicted felons. Assuming independence, that’s 1% of the adult population, or just over 2,000,000 people who have done both.

I worry there’s a kind of reverse cheerleader effect going on here. McQueens’s background is a fascinatingly varied list of stints, but take any one in isolation and it’s fairly mundane. “Sold pens”? Sorry if I’m not cowering at my own inadequacy.

There seems to be a more general phenomenon at play too. Take a close look at the various activities listed. What seems to quality an experience as interesting is that it’s:

  1. Low status
  2. Done by a high status person

Actually, farming is boring. It’s repetitive and mundane. But farming and then becoming a famous actor? Now that’s cool.

In a less ageist tone, the recent My Life Was Different essay (listicle?) via Agnes Callard and Tyler Cowen seems to confirm this view. It’s an interesting set of experiences in aggregate, but pull it apart and the mystique disappears. “Drunk 34 drinks in an evening”? “Slept on the beach for a week”? “Been mugged in Amsterdam.”? “Slept on Waterloo Station because I missed the last train”? That’s just being an alcoholic, homeless, victimized, and bad at planning.

But it all comes together when interspersed with experiences like “Met Bill Gates” and “Flew out of the side of the half-pipe at Squaw Valley on a snowboard”. Suddenly he’s not a vagrant, he’s a jetsetting socialite. Very cool.

You might object that I’m being way too harsh. Variety is the spice of life after all. Activities don’t have to be interesting in isolation, the point is precisely to build an interesting life taken as a whole.

I agree in part, but that’s not all that’s going on. It’s not interesting that Ralph Ellison was a “shoeshine boy”. That’s just growing up poor and being subjected to racism. He was a janitor too? That’s… bad actually. That we had one of our greatest literary talents locked up in menial labor is a national embarrassment. It’s a testimony to our failure to recognize and cultivate talent, no matter how exceptional. Of course you can object that Ellison at least got out eventually, but how many writers didn’t? How many great novels and great novelists did we lose to “interesting” lives?

For its part, My Life Was Different brags about “emigrating multiple times” and living in three states. Ralph Ellison recounts a migration too, a move “precipitated by his mother’s feeling that ‘my brother and I would have a better chance of reaching manhood if we grew up in the north’” Again, not quite as romantic.

A final retort might be that Ellison was a great writer not in spite, but because of his upbringing. That his life experiences fueld his literary achivements. That’s cliché, but worse, it’s cruel. I repudiate any artistic taste that requires 8 year old children to live “on worm-infested beans and stale bread”.

So sure, there are a couple caveats.

But mostly, it’s still the age-old classist fetishization of grime.

Taking a step back from self-righteous melodrama, there are a few more sober points to be made.

First, Tyler’s The Complacent Class was right that variety has been reduced in some important ways. As he writes in a chapter forebodingly titled The Reemergence of Segregation:

…the notion of mixing different socioeconomic groups has weakened or gone away, and those towns have been gentrified. In terms of income and class, both areas are now pretty homogenized in terms of social status. They no longer are districts where one part of America rubs shoulders with another, even though you will find many more well-to-do immigrants living next door to well-to-do Americans.

Or in another chapter on matching:

“Assortative mating”—that is, the marriage of people of similar educational and socioeconomic backgrounds—has become more widespread than in the past. That phrase refers to matching generally, but it also refers more specifically to men of high education and income marrying women of high education and income… This in turn propagates inequality across the generations, as the money and brains become clustered in high-powered, two-earner families, determined to do everything possible to advance the interests of their children and endowed with the skills to see that commitment through.

If interestingness is a function of high status people having done low-status things, it is also a function of class mobility. It is also, as I mentioned in the discussion of Ellison, a hole in meritocracy. As our systems for identifying and cultivating talent improve, the life stories of our rich and famous will tend to homogenize.

There are exceptions, sort of. According to legend, Vin Diesel’s life on stage began when he broke into a theater to vandalize it, but impressed the artistic director and was offered a role. Which is a good story, except that his adoptive father also happened to be an acting instructor. Or to take an equally famous example, you may have heard that Kanye dropped out of college. Which is a great underdog table, except that his mother was the chair of the English Department at Chicago State University. That does nothing to take away from their artistic accomplishments, it’s just to say, in the world of segregation and assortative mating, true rags to riches tales will only get rarer.

Second, there really has been a change in values. As a vivid example, Matt Lakeman describes the case of men who spent their lives clubbing seals to death on a remote island. He can’t relate to this at all. Why not? “I value my life and time too much.” This too is an seemingly inevitable consequence of our civilization’s newfound wealth. As our lives improve, risk-taking goes down, and the opportunity cost of subpar experiences goes up. We’ll still do it for the novelty, but like I said, that’s just fetishization.

Less anecdotally, Charles Jones (of “Are Ideas Getting Harder to Find?” fame), has a great paper on Life and Growth, modeling safety as a luxury good that becomes more demanded as wealth rises. Eventually, under some parameters, the “optimal rate of consumption” falls to zero, corresponding to an endless stagnation.

This brings into view a serious tension between my earlier condemnation of cruelty, and the inevitable endgame of increasing wealth and decreasing variety. I’m willing to argue that no one should have to subsist on infested beans, but how far do we take this?

Though we tend to over romanticize the benefits of suffering (“actually, pain is what gives life meaning”), it is true that variance holds immense importance for progress. We do need people to tinker and fail. We do need people to come into life with different backgrounds and experiences. That doesn’t have to entail poverty, but it does mean an escape from the hyper-tracked world of elite ivy-league-prep preschool.

Third, millennials are living by far the most interesting lives ever, it’s just that there’s a tinge of self-defeat in the way they go about it.

Just take a quick look at today’s Youtube stars. Mr. Beast has been buried alive for 50 hours, donated millions of dollars, bought a private island, and planted 20,000,000 trees. And there are maybe a few hundred videos detailing similarly outlandish feats.

Of course, the fact that he puts it all up on Youtube somehow detracts from the interestingness. What could have been genuine life experience is transmuted to lead: yet another performance from yet another performer.

I can sympathize with that view, but consider again where it leaves us. The possible quadrants are Boring+Public, Boring+Private, Interesting+Public, and Interesting+Private. By writing off social media celebrities as non-interesting, we’re committing to the view that only private people can actually be interesting. But by definition, we can’t observe their lives, locking us into the uncertain view that there may or may not be super interesting millenials we simply don’t know about.

Or we could just bite the bullet and accept that sure, Mr. Beast’s life is pretty cool.

[0] I read this article as a watered down version of Tyler Cowen’s The Complacent Class, which 4 years since publication, has aged exceptionally well. That’s to say, don’t go out of your way to read the AoM article, but it’s still a useful reference point.

[Added 8/13/21], Thanks to SlimeMoldTimeMold for contributing a related line from Emerson:

…A sturdy lad from New Hampshire or Vermont, who in turn tries all the professions, who teams it, farms it, peddles, keeps a school, preaches, edits a newspaper, goes to Congress, buys a township, and so forth, in successive years, and always like a cat falls on his feet, is worth a hundred of these city dolls. He walks abreast with his days and feels no shame in not ‘studying a profession,’ for he does not postpone his life, but lives already. He has not one chance, but a hundred chances.

A Subconscious Dilemma

The reintegration into society has not been easy. Long story short, I’m taking Buspirone for anxiety, and somewhat surprisingly, it’s working very well. That’s not the issue.

The issue is that like most psychoactive prescription drugs, Buspirone comes with side effects.

In my case, persistent and disturbing nightmares.

Of course, once I wake up that all goes away. I feel refreshed, I can go about my day. But there’s a question nagging in the back of my mind: how do you weigh the experiences of your unconscious self?

It’s not unconsciousness exactly. DreamMe is having experiences, and is thus a conscious being. But I can’t relate to their struggles. That’s in part the standard alienation associated with a being you’ve never met, can’t communicate with, and don’t have empathy for, but it’s also alienation caused by the fact that the entirety of their “struggles” are made up!

That’s not even the weirdest part of this whole saga. Dreamers–that’s to say, me when I’m dreaming–experience severe time dilation. It feels like you’ve experienced an entire lifetime, but in actuality, each dream only lasts 5 to 20 minutes [1]. So DreamMe thinks they’ve experienced an eternity of terror, but once I’m awake, I can’t really bring myself to care.

Once you start thinking about this too hard, it begins to raise all sorts of very thorny questions. So let’s put that aside for a second, bite the bullet, accept the premise that DreamMe really does have moral patienthood on par with the rest of us.

Though, first, we have to disambiguate two separate dilemmas. Am I worried about the suffering of DreamMe for altruistic reasons, or for egoist ones? In some sense, the egoist concerns obviate the altruistic ones. DreamMe is, after all, myself. And–pardon the grammatical confusion–if I don’t care about their suffering as something happening to myself, why should I care about it impartially?

But fine, acknowledge that a subconscious being is still conscious, accept their reality as legitimate, and bridge the ought-is dilemma to convince ourselves that the moral harm occurring is worth preventing.

What then? There’s a simple question of weights: the cost of DreamMe’s psychological panic versus the benefits of AwakeMe’s decreased anxiety. But then there’s a more serious question, the one that stops me from accepting this line of reasoning outright: where does it all end?

Once I accept the moral importance of a subconscious being and let it become a decision-relevant factor, one that has the potential to outweigh even my own mental wellbeing, what else do I have to buy into? Should I accept that when I take (some) painkillers, I’m letting my mind off the hook while allowing my body to suffer? That when I take anti-anxiety meds, I’m silencing a part of my consciousness, even while knowing that it continues to exist and run in the background? [2]

You might object that this proves too much. That in the case of DreamMe, I at least know that there is suffering taking place, and a (sub)conscious being experiencing it all. But look, we’re talking about experiences I can barely remember more than shreds of, and a recollection based on a few seconds of offhand impressions before I get up, turn off the alarm, and begin my day. Recollections that we know are seriously skewed, not to mention at odds with consensus reality.

So if this all sounds ridiculous and overly scrupulous and outright silly, then fine, I agree. I don’t like where this road is going either.

If you’ve ever had anxiety, you’ll find this whole framing deeply ironic.

Anxiety is, at its heart, all about made up struggles. You’re worried strangers on the street are judging you, even though they couldn’t care less. You’re worried your friends don’t like you, even though they actually do. And so on.

So what makes nightmares, another form of worrying about totally made up things, any different?

One answer is that they lack even a referent. Anxiety is at least about something happening in the real physical world, whereas nightmares are conjured purely out of the ether.

Except that’s not quite right. My nightmares are surreal, unreal even, but they’re definitely fixed in reality. They are, albeit in a very loose sense, about “real” things.

Towards the end of Harry Potter, Dumbledore tells our protagonist “Of course it is happening inside your head, Harry, but why on earth should that mean that it is not real?” On first read, it’s a noble nod to the inherently intersubjective nature of our constructed reality. Government currency is just fiat. Scientific truths are just expert consensus [3]. The “text” does not exist, but is rather created through interpretive dance between author and reader.

On the other hand, intersubjectivity also acknowledges that not all realities are created equal. If you told me that actually, funding your vacation is the world’s most impactful cause because it would make you really immensely happy, I’m under no obligation to believe you. Similarly, if you told me that in a matter of 5 minutes, you experienced hours of disturbing hallucinations, I would have no need to treat your problems with much gravity.

Since at least the 3rd century BC, when Master Zhuang wrote about being a butterfly, the good, sober, conscious, awake, and unscrupulous among us have been telling those puerile airheads to get off the grass [4] and come back to reality.

That would be a nice conclusion, but it’s the wrong place to stop.

Unfortunately for the sober among us, it turns out that society owes great debts to altered states of consciousness. As SlimeMoldTimeMold recounts in tremendous detail:

Mullis himself makes it pretty clear that LSD deserves a lot of the credit for his discovery. “Would I have invented PCR if I hadn’t taken LSD? I seriously doubt it,” said Mullis. “I could sit on a DNA molecule and watch the polymers go by. I learnt that partly on psychedelic drugs.” If this is even partially true, most progress in bioscience in the past 40 years was made possible by LSD.

Mullis went on to win the Nobel prize for the invention of PCR, described in no humble terms by Wikipedia as “fundamental to many of the procedures used in genetic testing and research… now a common and often indispensable technique used in medical laboratory research”.

As if that wouldn’t, on its own, be more than enough, SMTM goes on to credit drugs for work by Newton (caffeine), Sigmund Freud (Cocaine), Jules Verne and Thomas Edison (cocaine in wine), alongside Steve Jobs, The Beatles, and Douglas Englebart (LSD).

Dreaming is not quite the same as being on drugs, but a relevant point stands. Even if these experiences, and the worlds they take place in, appear divorced from our own, we cannot simply write them off as fanciful diversions.

That’s to say: I certainly don’t believe in Machine Elves as literal physical entities in the material world, but if they can factor primes, who cares?

Again, dream states are not exactly drug-induced, but there are similar reasons to believe they bear some meaningful connection to consensus reality. Larry Page (reportedly) came up with the idea for Google in his sleep. James Watson (again, reportedly) had a key insight about the structure of DNA while dreaming (Crick was, for his part, (reportedly) on LSD). Dmitri Mendeleev, who created the modern periodic table of elements, once credited his work to dream-space:

I saw in a dream a table where all the elements fell into place as required. Awakening, I immediately wrote it down on a piece of paper only in one place did a correction later seem necessary.

Equally anecdotally, I wrote the entirety of Become a Billionaire on my phone at 3am after a series of vivid dreams. I don’t track page views, but at least on the basis of Twitter hype, it’s easily my most successful post.

At some point, I’m obligated to tell you that none of this is either an endorsement or criticism of Buspirone. If you have anxiety, you should consider seeing a psychiatrist. If you don’t have anxiety, I can’t recommend taking it for the dreams, since they’re mostly unpleasant. But hey, I’m not a doctor, and it’s your (or at least DreamYou’s) life.

That leaves us with a dilemma “does my subconscious pain matter?”, followed by an attempt at resolution “screw the immaterial reality”, and finally an oddly utilitarian counterpoint “the immaterial reality seems to have an awfully good track record”.

Throughout, I’ve been comparing the pain of nightmares to the pain of anxiety. That the cure for the latter causes the former is perhaps no coincidence. The cliche psychoanalytic interpretation is that the feelings are not erased, merely repressed.

So this whole piece has been an exercise in taking bizarre ideas too seriously, but it’s also an attempt at expression. A year of lockdown was interesting, and, in many ways, can be credited for the creation of this blog and everything that’s come since. But it was also not, in the most conventional sense of the phrase, mentally healthy.

It’s not really that I’m having trouble reintegrating into society. It’s that on some level, I don’t even want to anymore. [5] Which makes the problem not only moral, but proleptic. It’s not a question of wants, but of self-transformation. Should I turn myself into a person who spends less time on the internet and more time in meatspace? Should I stop taking Buspirone and experience more anxiety? It’s rare to have such clear decisions and axes on which to affect substantial questions of personality, but this is a transformative moment after all.

Or as John Green should have said “You don’t get to choose if you get hurt in this world, but you do have some say in which you exists to feel it.”

I hope you like your choices.

[1] The moral importance of time-dilation turns out to be an absolutely fascinating question. For a more serious discussion, see Jason Schukraft on the subjective experience of time, critical flicker-fusion frequency and related welfare implications.

[2] That the subconscious anxious self continues to “run in the background” is a matter of some debate, but is common testimony among people taking drugs for a variety of mental health problems. It’s not that the feeling goes away, but that you can choose to ignore it.

[3] Not to mention, the selection of those experts is itself merely the consensus designation of other experts!

[4] Though ironically, the equivalent modern saying is “touch grass”.

[5] That’s not even to mention the specific difficulties of pseudonymous blogging in a newly social world. As you may have noticed, Batman has allies, but Bruce Wayne has no friends.

Which is not to say I’m a superhero in this situation. But we should ask, as long as it’s come up, why so many of the pseudonymous role models tend to be. Don’t ordinary people also need protection? Don’t you also want to be safe? This isn’t about cancel culture, or even Balaji’s Westphalian peace, it’s about trying to hold back at least some small part of yourself, for yourself. Whatever that even means at this point.