Friday, October 12, 2012

Book 8: The Automatic Millionaire by David Bach

Here's the lo-down.

First, find your Latte Factor (it could be your $3.50 coffee, your $9 lottery ticket, maybe even your $.50 piece of impulse chocolate). Now multiply it by 7, then by 4, then by 12.

Lets take your $3.50, one coffee a day for a year is $1,176. Now I am sure you have done the math before. But here's where it gets interesting. Mr. Bach's point is not how much you are spending, but that you have the money to spend. And if you have the money to spend, well then you have the money to invest and save.

It goes like this.

$3.50 a day in a 401(k) or IRA account will amount to .... $1,742,467 within 40 years, give or take a little. Oh, were you still caught up in the almost 2 MILLION DOLLARS YOUR LATTE ACTUALLY COSTS?

Sorry, but this is exciting!

David's 3 keys to wealth are:

  1. Pay Yourself First with a compounded interest account
  2. Save 1 years worth of your monthly expenses with a Money Market Account
  3. Buy your house and be clever, but legal, with your payments
The "Automatic" portion is in how you invest, save, or pay your mortgage - automatically. Sign up for automatic withdrawal or direct deposit into your various accounts. One hour to set up, and then you can literally sit back and automatically increase your worth. 

You can't afford not read this one, so read it.


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