Over the past few years, a debate has raged over the idea that avocado toast is keeping millennials in the poor house. The debate was originally spawned by Tim Gurner, the Australian business magnate when he appeared on 60 minutes.
“When I was trying to buy my first home, I wasn’t buying smashed avocado for 19 dollars and four coffees at 4 dollars each,” he said. He wasn’t alone however as fellow Austrialian Bernard Salt said: “I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economizing by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.”
Keep in mind we are talking about Australian money, so $22 would be $17 in US dollars.
Are these rich business magnates right though? Well, the debate isn’t really about avocado toast, it’s about the costs of eating out. When you really do the math, things get interesting.
Is eating out making people poor?
Using US-based prices the average avocado toast price seems to be around $8. We won’t get into the efficiency of the calories involved because rice is obviously going to give you more bang for the buck, we’ll just stick to cost to make at home vs at the restaurant.
It’s winter now as I’m writing this so avocados are expensive, looking online I can get them locally in NJ for about $1.75 each if I buy 4. With two slices of toast, you’ll probably use half an avocado, so 88 cents for the avocado. We’ll need two slices of toast as well.
Let’s say each loaf is $4 and has 12 slices, which will cost another 66 cents for each slice. We are now up to $1.54. Add in spices and maybe some olive oil and that brings us to $2.
Yeah, it’s probably making people poor
Again it’s not avocados per se, it’s the fact we are eating out, in this example, we are spending 4x as much to have someone else prepare our food. Sure it might taste better, but it sure is more expensive.
Our culture these days is that we are too busy to have time to cook and we are paying for it.
First of all, I’m guilty of this more than anyone. Before I started my LeanFire journey I did the math and realized that I was spending nearly $1,000 a month on food. $650 eating out and $350 on groceries. Eating out was the first thing I curbed, getting my food bill down from $1,000 a month to $400 the first month, for me this was a $600 a month, 0r $7,200 a year savings.
I justified a lot of my spending by saying that I had to eat out, I didn’t have time. True as it was, it was costing me more than I realized. Enough to buy a house. In fact in enough to buy multiple houses!
If I had taken that money, put it into the stock market over the last 10 years I’d have 197k, or if my returns were lower at least I’d have had 170k. Considering I paid less than $100,000 for my house it goes to show how much eating out really cost me.
One thing worth mentioning is that most of my eating out was just food I grabbed while at work, I’d occasionally go to a nice dinner but for the most part it was grab and go.
So, yes I’d say the avocado myth is true.