This story is part of CNBC Make It’s Millennium money A collection that details how people around the world earn, spend and save.
Hector Carvajal lives for the hustle and bustle. He does not know any other way
He saw it from his neighbors growing up in the Dominican Republic, and then stateside when he was 8 and his family moved to the Bronx in New York City. His mother’s first job in the United States was cleaning tables at McDonald’s, and his father drove a taxi. As a teenager, Carvajal saw people selling candy on the subway and at school, so he decided to give it a try.
As an immigrant family, she tells CNBC, “We’re looking for it.” “It’s a sense of hunger, a sense of drive. We don’t come here with nothing, so we try to make something.”
That drive led him to study business marketing at the University of Rochester, and in 2019, he brought a class project to life as a real business. He took a leave of absence from college with a year left before graduation to focus on it full-time.
Today, the 26-year-old runs Café Don Carvajal, a South Bronx coffee roaster that sources its beans from the Dominican Republic.
From January to early December 2022, his business generated approximately $190,000 in sales. After that, Carvajal lives on a salary of $25,000. “I just make it work, like my mom did,” she says.
Here’s how he managed his money while growing his business.
From the classroom to the cafe
When Carvajal was assigned to mock up a business plan in college, his mind immediately turned to coffee. “In the countryside of the Dominican Republic, we farm, we harvest, we roast the coffee,” he says. Carvajal has vivid memories of his mother brewing a fresh batch for the house every morning.
He wanted to bring attention to Dominican products, which he felt were underserved despite Dominicans being one of the largest immigrant groups in New York City.
He named the business after his grandfather, who supported his family as a farmer in the Dominican Republic, and designed the logo.
“I’ve always been interested in finding a way to go back to where my family started,” says Carvajal. “Being a New York kid coming from a farming family in the Dominican Republic, I felt that Don Carvajal was a bridge between these two experiences of growing up.”
The Carvajal school project was successful. After the class, he still had some extra coffee left and posted it for sale on social media. This attracted the attention of many of his friends, and Carvajal realized that he had a real opportunity.
Carvajal returned to his dorm room and immediately registered the name of Don Carvajal’s Cafe as a business in New York State. He used some start-up money — a $500 credit card and a $300 grant from the school — to buy more coffee and sell it on Instagram.
He reinvested any revenue into growing the business, including by finding a roastery to operate, getting a delivery truck and hiring employees. He gained more attention during 2021 with a $60,000 Kickstarter campaign.
As a roaster, Carvajal sources coffee beans, delivers the raw product to its roasting facility in Long Island City, creates different roast profiles, packages them, and sells them to customers across the country. He gets most of his sales from e-commerce, farmers markets and sales to restaurants.
“I learned you don’t need much to survive”
Growing up with little money is what led Carvajal to the frugal mindset he has today. He pays himself $25,000 a year and lives as much as possible. “I learned that you don’t need a lot to survive,” he says.
Carvajal’s mother taught him about credit at a young age—he learned that building and protecting his credit score was important if he wanted to rent an apartment, finance a car or open a business. He got his first credit card at 18 and never maxed it out, on his brother’s advice. It is also necessary: to pay it in full every month.
For the first three years of his business, Carvajal lived rent-free with his mother in a rent-stabilized apartment in the Bronx. Thanks to him, Carvajal was able to reinvest every bit of money he made from the business.
Carvajal credits his parents for his financial discipline today: “Thanks to their flexibility and hard work and their honesty, I am now the type of person who carries these values. And I can do my job , I am capable. To chase my dreams.”
How does he spend his money?
How Carvajal spent his money in November 2022.
- Optional: $636 for shopping, home goods and entertainment
- Savings and investment: $588
- Food: $569 for meals and groceries
- Transportation: $264 for tolls and license renewal fees
- Pet insurance: $40 a month for his French bulldog, Tosti
Carvajal recently signed a new apartment lease that came with a rent discount so he didn’t have to pay in November. After the grace period, he and his girlfriend split their rent and utilities, paying $1,500 each.
Carvajal qualifies for free health insurance through Medicaid and writes off his phone bill and car payment as business expenses under an LLC. In November, he paid for other transportation costs, including tolls and driver’s license renewals, out of pocket.
Otherwise, Carvajal spent just over $600 on household goods for his new place and winter clothes for this month.
With some extra cash freed up, he’s trying to get back into the habit of investing through Acorns, a micro-investing platform. In November, he made three deposits of $196 and plans to automatically invest this amount weekly.
Finally, he wants to make money through passive income, such as setting up an ATM or vending machine business.
Carvajal supplements his grocery bill by trading with other farmer-market vendors for food. He trades some of his coffee with them for what they eat in season.
Another of Carvajal’s main expenses: taking care of his French bulldog, Tosti. In a given month, his share comes to about $40 in pet insurance and $60 in cleaning after splitting expenses with his girlfriend.
Coffee with a mission
When asked about his goals for the future, Carvajal first thinks of paying it forward in the world of coffee.
His focus: getting more Dominican coffee on the map. In the 1900s, he says, the Dominican Republic exported much more coffee, but in recent decades, the climate crisis and invasive coffee leaf rust have wiped out much of the farmland.
“Many farmers did not have the capital to reinvest in their farms,” explains Carvajal. We are slowly coming back.”
This is also why it is so important to him to source his coffee from farmers in the Dominican Republic. In the early days of Cafe Don Carvajal, he connected with Eddie Ramírez, a farmer in Jarabacoa, and spent a week there getting to know the family and their property.
“I believe it’s important to have a relationship with the coffee farmer because at the end of the day, it creates more transparency between you, the producers, and the end consumer,” says Carvajal.
“It’s a meaningful deal in more ways than one,” he adds. You are the one investing in their industry. And that’s what they’re going to do. With you.”
As far as his business goes, he hopes to expand Don Carvajal Cafe’s retail and wholesale presence and expand its boundaries beyond New York. He just signed a deal to sell his coffee in Whole Foods stores across the Northeast region of the US through March.
Finally, he also wants to provide for his mother: “I want to make sure I take care of her financially for all the good things she’s done for me to be here today.”
What is your budget breakdown? Share your story with us A chance to be featured in the next installment.
Register: Get smarter about your money and career with our weekly newsletter
Do not miss: The 31-year-old earns $15,000 a month as a voice actor and lives in a school bus.