A good investor knows that most of investing is simple psyche 101, understanding people and what motivates them. That’s why the common advice, made popular by David Bach of the Finish Rich book series, of saving money on “little purchases such as lattes, fancy coffees, bottled water, fast food, cigarettes, magazines” makes me a tad bit crazy.

Little purchases? Find me a smoker that thinks cigarettes are a “little purchase.” Find me a coffee addict that thinks coffee is a “little purchase.”

Sure, the numbers make sense. On Bach’s website, he shows how a dedicated investor can take $5 of coffee savings a day and turn it into $948,611 in 40 years (at 10% beating most mutual funds but again, that’s a whole other post).

Wow. Impressive, right?

Except that in order to do this, the investor must kick a habit like drinking coffee or smoking. Not an easy thing to accomplish.

I know. Once upon a time, I was addicted to Diet Coke. Addicted, as in I had to have my hit every single day. I loved investing then (and still do) and I knew that I was wasting money on my cola a day habit so I tried quitting numerous times. I went through withdrawal (I was one grumpy bear…with the shakes, not a good combo) but I just couldn’t do it.

Forget a million dollars in 40 years, you could have promised me a million dollars a week from then and I still couldn’t do it. The motivation was not enough (I finally quit after developing a caffeine intolerance).

Any investing program requiring the participant to kick an addiction first is doomed to failure (only 2% of unaided attempts to stop smoking succeed even with 70% of all smokers wanting to quit). Actually any program requiring deprivation has a high chance of failure (negative motivation is substantially weaker than positive motivation).

That’s not saying that Bach’s advice is garbage. Far from it. Applied to expenses with no emotional connection to the investor, this advice rocks. It’s a great source of seed money.

I don’t mind shopping around for a few minutes to pay $500 less on insurance (for the same coverage). That $500 is the equivalent of 100 lattes but a lot less painful to the coffee lover.

Not a car fan (I only care that I can get from point A to point B safely), I don’t even mind paying $10,000 less by buying a good quality used car over a shiny new one. Heck, make it $9,998. I’ll spring for a new car scented air freshener. That’s the equivalent of over 5 years worth of lattes. Again, a less painful switch.

Just don’t ask me to give up my addictions (now Diet Ginger Ale and travel and steamy romance novels and…).