While the so-called latte factor may not be a new phenomenon, it is one that many of you will not have heard of….

Surprisingly, The Latte Factor is not exclusive to coffee either, as it refers to how a small, but frequent, habit can actively restrict your chance of building wealth. First discussed in David Bach’s book ‘The Automatic Millionaire‘ 11 years ago, it is most prominent in locations that are home to a professional audience with relatively high levels of disposable income.

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This includes the bustling city of Dubai, but how bad is the latte factor here and what can you do to overcome this?

The Latte Factor in Dubai

Despite a recent dip, Dubai is set to rebound in 2018 with the UAE projected to achieve a GDP growth rate of 3.4% next year. This is good news for the city, with job creation, real wage growth and disposable income levels also likely to increase incrementally.

This is great news for this city (not that you necessarily needed it) which you may be surprised to note also has a thriving coffee culture. There is a wide range of drinks available to customers, for example, each of which is made with a certain degree of skill and aptitude. Iced brews are also particularly prominent due to the climate, with Dubai’s bustling army of city slickers driving one of the largest coffee markets in the world.

How to Beat the Latte Factor in Dubai

This combination of factors, along with the progressive nature of the city, makes the latte factor a genuine talking point in Dubai. The question that remains is how can Dubai’s professionals tackle this issue, and ensure that they make their income work in a way that can build sustainable wealth?

The key is to first understand your true financial status, by listing your income and outgoings before determining an accurate amount of disposable income. You should then look to deploy this as effectively as possible, committing between 10% and 20% to savings and minimising the amount spent on seemingly insignificant but everyday luxuries (without eliminating them entirely, of course!)

In terms of maximising your savings, you should consider seeking out accessible and affordable platforms that can accrue passive income. For example, forex trading has been revolutionised in the digital age as technology has removed many of the barriers to entry that once surrounded it. As a result, aspiring traders can now access a host of major and minor currency pairs online and in real-time, without the need for huge financial resources or significant technical knowledge.

If we assume that the average cup of coffee costs between 14 and 66 dirhams (AED) per day, for example, over the course of a month you will spend up to 1,980 AED funding your habit. By reducing the amount spent here, you can free up income and reinvest this into currency trading and the financial markets as a whole, as you look to build wealth incrementally and avoid the potential pitfall that is known as the latte factor!