Cost of a Habit
Inspired by the comic “The 4% Rule Ruins Coffee.” Once you learn the 4% rule, every recurring expense has a second price tag.
- Yearly cost
- Total you'd spend
- Growth from investing
- Retirement cost (25× yearly)
The retirement cost is how much extra you'd need saved to keep paying for this habit forever in retirement, using the 4% rule (yearly cost × 25).
How it works
Yearly cost = daily × 365, weekly × 52, or monthly × 12.
Invested instead is the future value of investing that yearly amount at the end of each year: yearly cost × ((1 + r)years − 1) ÷ r.
Retirement cost is yearly cost × 25. If your FIRE number is 25× your expenses, then every recurring expense adds 25× its yearly cost to the number you need. A $5 daily coffee is $1,825 a year, which takes about $45,625 of savings to fund forever.
None of this means "never buy coffee." It means: spend on what you actually love, and cut what you don't even notice.
Educational only, not financial advice. These are simplified estimates using constant returns. Real markets are bumpy, and taxes, fees and inflation vary.