The “Latte” Factor Do you know what your time is REALLY worth? I’m not talking about the hourly salary you get paid because that’s insufficient; it’s about the productivity of that hour and what you can PRODUCE. So if you’re a partner of the firm, that number should be determined by what revenue and profits you control; if you are an operations person, I’m sure that whatever your hourly rate is, there is a minimum multiple of 3 to 5 times that because if your boss wasn’t getting a higher rate of return for your hourly salary, you wouldn’t have a job.

In order for you to really “get” the meaning of this concept, you need to really understand the value of time and from my experience, most people DON’T know the value of time. They SAY they do, but their actions are very different. For example, I’ve seen partners and office managers trying to fix the printer in their office – something they could pay a technician a couple of hundred dollars to do. So while they SAY they understand “time is money,” their actions suggest otherwise.

Now I want to share with you concept called “The Latte Factor.” This term was coined by best-selling author David Bach in his book “The Automatic Millionaire.” The latte factor is based on the simple idea that all you need to do to become wealthy is take a hard look at the small things you spend your money on every day and see whether you could redirect that spending into savings.

For example, a little $3 purchase made every day on common things like a latte (coffee) redirected into an investment account earning 6% will become $ 15,298.95 in 10 years. Saving $3 a day might not seem like much, but over time it adds up, so why don’t MORE people do it? Because saving $3 a day is so insignificant. Essentially, it’s the piranha factor – one piranha can be annoying and perhaps bite you. But a swarm of them will eat the flesh off your bones. So what does this have to do saving time and technology?

Technology – meaning the computers, software, printers, and other devices in your network – can be a HUGE time saver and boon to your productivity if they are always up, running fast,
and problem-free. However, when they are slow, crashing, causing problems, and break down, it can be an ENORMOUS drain on your time – which, as we said a moment ago, is money…remember, time is money?

Here’s the mistake I see so many firms making in order to save money – they hang on to old, slow, problematic machines to save some money – OR they try to troubleshoot them or
support them on their own. But because they aren’t trained technicians, they end up taking 10 times as long and never really fix the problem, wasting hours of time on this when they could and should be doing far more productive things with their time.

That being the case, why don’t more people just outsource this to a trained professional and take that off their plate completely? Because of the latte factor!

Because they’re only spending 10 minutes here, or 15 extra minutes a day waiting for a program to open or to clear out spam or to reboot or whatever, they don’t really see it for the time drain it is.

I have never met a partner of an accounting firm that could not tell me what a day of downtime would cost them. But I have met plenty that have PC’s and servers that are 4 to
5+ years old, where their staff are frustrated about how long it takes them to do their work, where it takes over 5 minutes to scan a document into the system and networks with no SPAM filtering so their staff spend a few minutes every day deleting SPAM emails from their inbox. Something to think about over your morning latte!