Quick answer: The 20 cent iced coffee is YouTuber Graham Stephan’s budget recipe: brew a full 12-cup pot of supermarket ground coffee in a drip machine, chill it in the fridge, then pour it over half a glass of ice with a splash of creamer. His ingredient costs worked out to about 14 cents a cup; the point is the money you save versus buying café coffee.
The “20 cent iced coffee” was coined by Graham Stephan, a real estate investor and YouTuber who talks about personal finance and frugal living. He often tells viewers to spend less on coffee and avocado toast, and the 20 cent iced coffee is his alternative.
Graham uses hyperbole to state the 20 cent iced coffee is his secret to all of his success, millions of dollars, and millions of followers. However, that’s probably not too far from the truth. We have also looked at whether coffee is good for you.
Due to popular demand, Graham eventually shared the full recipe on his channel.
It’s liquid gold. People think it’s oil. They’re idiots. The real liquid gold is right here in the 20 cent coffee.
Graham Stephan, Youtuber
In this guide 4 sections
How do you make 20 cent iced coffee?
https://www.youtube.com/watch?v=tvL4FF2lMnw
If you want to make the 20 cent iced coffee exactly as Graham does it below is a list of all the materials and equipment he uses and the process he uses to brew the 20 cent iced coffee.
There are links so you can check prices on anything you are missing, but if you want to be like Graham, buy everything on sale at your local store. If you are choosing a cheap ground coffee, see which supermarket coffees are worth stocking up on.
What you need
- Peet’s Ground Coffee, Dark Roast, Major Dickason’s Blend (Graham uses Peet’s House Blend, which isn’t currently available on Amazon)
- Kroger Basket Coffee Filters
- Mr. Coffee 12 Cup Coffee Maker
- Coffee-mate Coffee Creamer
- Libbey Polaris Glass Cup
How to brew
The goal is to get the most value out of every scoop of coffee.
So take your coffee pot and fill it to the max. Your water should be filled to just above the 12 cup line in your pot. Pour all this into the reservoir in the back and it should be filled all the way up to the overflow. Remember, if you don’t fill it all the way up you’ll be losing money!
Next, put in the coffee filter into your coffee maker and pour in your coffee grounds. You should fill the filter up to about halfway. (For a more precise dose, see our guide to the coffee to water ratio.) Make sure the water spout is positioned above the grounds.
Once this is all done, turn on the coffee maker and brew all 12 cups of coffee. After the 12 cups are done brewing put the pot in your refrigerator to cool down the coffee so your ice doesn’t melt too quickly. Graham’s refrigerator is set to 38 degrees Fahrenheit.
The last thing you have to do is fill your glass halfway with cubed ice from your refrigerator. Fill your cup 75% of the way with the chilled coffee so there is room for the creamer. Put a dash of the creamer and you’re done.
How much does 20 cent iced coffee really cost?
Here is how Graham’s costs broke down when he shared the recipe. Prices have changed since then, so plug in what you pay today.
| Peet’s Coffee | $8.70 for 66 cups |
| Kroger Filters | $0.05 per pot |
| Coffee-mate Creamer | $0.25 for 66 cups |
| Total | $9.00 / 66 cups = about $0.136 (13.6 cents) per cup |
Price per cup at the time of Graham’s video
That leaves about 6 cents of the “20 cents” for pouring yourself a little more coffee.
Can 20 cent iced coffee make you a millionaire?
Graham’s philosophy is by drinking a 20 cent iced coffee you will be saving money you will have otherwise spent. His argument: invest the money you would have spent at a café, and compounding does the rest.
Assume you save $2 per cup and drink 3 cups a day, or $6 a day ($2,160 a year over 360 days). If you invested that at the start of each year and earned an average 7% a year, you would have about $1.33 million after 55 years. Real returns vary year to year and aren’t guaranteed, so treat this as an illustration, not a promise.
| Year | Saved that year | Total with 7% growth |
|---|---|---|
| 1 | $2,160 | $2,311 |
| 5 | $2,160 | $13,291 |
| 10 | $2,160 | $31,933 |
| 15 | $2,160 | $58,078 |
| 20 | $2,160 | $94,749 |
| 25 | $2,160 | $146,181 |
| 30 | $2,160 | $218,318 |
| 35 | $2,160 | $319,493 |
| 40 | $2,160 | $461,397 |
| 45 | $2,160 | $660,424 |
| 50 | $2,160 | $939,570 |
| 55 | $2,160 | $1,331,086 |
Illustration: $2,160 invested at the start of each year at an average 7% return
Is 20 cent iced coffee worth it?
This is just one way you can live like a minimalist and save some extra dollars to save in an investment account. Personally, I am a huge fan of Graham Stephan and love the idea of the 20 cent iced coffee as well as dividend growth investing for the long term. Cheers, this one is to you, Graham!
If you want to cut your coffee spending further, see our take on whether coffee makes you poor, or upgrade the recipe with a homemade cold foam using our guide to frothing milk at home.
Frequently asked questions
Why chill the coffee before pouring it over ice?
Graham brews a full 12-cup pot and keeps it in the fridge so it is ready to pour. Chilling it first also means the ice melts more slowly and doesn’t water the coffee down.
Can I make 20 cent iced coffee without a coffee maker?
Yes. Any brewing method works as long as you make a big batch and chill it. See our guide to making coffee without a coffee maker.
What is the difference between iced coffee and cold brew?
Iced coffee is hot-brewed coffee that is cooled and poured over ice, like this recipe. Cold brew is steeped in room-temperature water for many hours. Our guide to the different types of coffee explains both.
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