Financial adviser and author David Bach first coined the phrase “The Latter Factor” in his 1999 book Smart Women Finish Rich. He believed cutting spending on things you don’t need, such as expensive latte drinks, was the way to financial independence.

In the decades since, plenty of financial gurus have espoused similar sentiments, suggesting you could get rich by reallocating latte expenditures into more productive uses. 

For most people, success in life comes down to three big financial decisions. If you make them right, you’ll probably be in a good place when you retire. 

Where you go to school, who you marry, and the home you buy can take you further than any advice about living frugally will ever provide. Here’s why. 

Key Points About This Article:

• Student loan debt has gotten so high a college degree isn’t worth what it once was. 
• Marrying the right person is financially and emotionally significant.
• For most people, buying a home is one of the most expensive financial decisions they’ll ever make. 

Your Education Choices

According to the Education Data Initiative, the average federal student loan debt is $37,853. Approximately 42.8 million borrowers have federal student loan debt. If you add the $128.8 billion in private student loan debt, the average per borrower rises to $40,681.

Student debt has become such a problem that it’s a “crisis” in the media. Even the Council on Foreign Relations has written about it. In April 2024, it pointed out that U.S. borrowers owed $1.6 trillion in federal student loans, making it one of the largest forms of consumer debt in the U.S. 

“In the late 1980s and early 1990s, most high schoolers did not enroll at colleges or universities; of those that did, less than half borrowed money to do so. In 2022, almost two-thirds of recent high school graduates were enrolled, and most took out student loans,” the Council wrote in April. 

High School students should consider getting a skilled trade rather than going to a liberal arts college because the aging population will ensure the demand for skilled trades far outpaces the supply.

Furthermore, the program’s length and the cost of attending trade schools are considerably less than those of a liberal arts college. ServiceTitan data suggests the gap between the two at the high end of school costs is as much as $45,000 annually. 

While the trades aren’t for everyone, if you’re mechanically minded, it could put you in a better financial position earlier in your career by avoiding piling on the debt on the way to a healthy paycheck.   

Your Choice of Life Partner Matters

Warren Buffett is one of the world’s wealthiest people. He knows a thing or two about finance. Yet, one of his most important pieces of advice is making a good decision about your life partner choice. 

“You want to associate with people who are the kind of person you’d like to be. You’ll move in that direction,” Fortune reported Buffett’s 2017 comments from a conversation with Bill Gates. “And the most important person by far in that respect is your spouse. I can’t overemphasize how important that is.”

And, interestingly enough, Buffett suggests that one of the key things to look for in a spouse is someone with low expectations. Further, the billionaire emphasizes how important it is to marry the “right” person. 

“Marry the right person. I’m serious about that,” Buffett said during the 2009 Berkshire Hathaway annual meeting. “It will make more difference in your life. It will change your aspirations, all kinds of things.”

When you consider all of the costs of divorce: legal fees, spliting of assets, the effect on the children, and your own personal grief, Buffett’s words of wisdom about choosing the right person make complete sense. 

The Marriage Foundation suggests that over 50% of divorces cause poverty.  

“Litigation guarantees you will suffer financially. Your income is going to drop precipitously; for both of you! It’s not going to ‘work itself out’; it won’t!” The Marriage Foundation’s Paul Friedman writes. 

If that’s not a reason to take your choice of life partner seriously, nothing is. 

Your Home Is Your Castle

The New York Times’ David Brooks wrote about the home-buying decision in January 2017.  

“It is difficult emotionally. Like a lot of the biggest decisions, it is more emotional than coldly rational. People generally don’t select a house; they fall in love with it,” Brooks wrote. 

The act of buying a home is timeless. While there are financial implications, to be sure, the emotions felt while going through the process never get old. It’s virtually impossible for most human beings not to get emotional when buying a home. 

In Warren Buffett’s 2010 Berkshire Hathaway letter to shareholders, he said the purchase of his house in 1958 was the third-best investment he’d ever made behind wedding rings for his first and second wives. 

“Home ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates. All things considered, the third best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks. (The two best investments were wedding rings.) For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come,” Buffett wrote. 

In the end, however, it is a lifestyle choice and not an investment in the truest sense. 

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