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Americans Favor Coffee Over Financial Freedom

A little and a little, collected together, becomes a great deal; the heap in the barn consists of single grains, and drop and drop make the inundation. - Saadi

Towards the end of last year, we published an article titled Americans favour coffee to stock market investing where we demonstrated that an overwhelming majority drink coffee as opposed to investing in the stock market’ 61% of Americans drink coffee on a daily basis as opposed to the 48% that invest in the market. On aannual basis, Americans spend about $1200 on coffee. If they put this money into the market and allowed compound interest to do its magic, it could grow into a nice tidy sum over a period of 20 years.

The latest data provides even more attention-grabbing data. Starbucks is one of the most popular places to get a cup of Java from, even though (in our opinion) it does not come close to ranking as the best place to have a cup of coffee. The picture below illustrates just how much people love their daily coffee.

Individuals are more interested in loading their prepaid Starbucks cards with money as opposed to contributing to their 401K plans. This is a clear illustration of how people today are more concerned with how they look or what image they portray as opposed to building a sustainable nest egg. S&P Global Market Intelligence states that Starbucks has $1.2 billion in unspent funds; these are funds that customers have added to their prepaid cards. In 2014, the same customers added $614 billion, so the jump to $1.2 billion is truly stunning. This is more than the total deposits some banks take in for the year. In the same period, the average contribution to a 401K increased by a measly 4.1%.

From a psychological perspective, it reveals that the majority have still not embraced the markets. According to bankrate.com, a large portion of the population states that they don’t have enough money to invest in stocks. Based on the chart below, 53% don’t have enough money to purchase stocks, and 21% don’t know enough about stocks; this does not bode well for the current generation. However, these chaps seem to have no qualms about...


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