A Penny Saved

This is the first of three short articles based upon the principles and plans in the book “The Automatic Millionaire by David Bach.  Read my full review of the book!

Everybody want’s to be a Millionaire right?  So, besides winning the lottery or having wealthy aunt Harriet die, how do we accomplish that?

David Bach has a few ideas in The Automatic Millionaire.  His simple plan can be broken down into three easy sections.  This is the first.

Find the Money.

You can’t be a Millionaire with out a million dollars. Sure you have to save money.  You have to make your money work for you too.  But where does the money come from?

David introduces the readers to “The Latte Factor” early on in the book.  “The Latte Factor” is a really, really simple premise.  There is something in your daily routine that you spend money on that can easily be cut out.  For some, it’s a morning Latte.  A normal Latte can cost upwards of $4 each.  If you buy one 5 days a week, that’s $20 a week.  $80 a month.  So, David says, if we merely cut the Latte out of the daily routine we free up $80 a month for investment.

It’s not just Lattes either.  If you don’t drink a Latte every day, maybe it’s a pack of cigarettes.  Or a donut.  No matter the vice, cutting it from your daily routine could get you on the right track to becoming an Automatic Millionaire.

What’s your “Latte Factor”?  How much is it costing you?  If you account for growth, $80 a month could add up to hundreds of thousands of dollars over 20+ years.  Is that Latte that important to you?

Come back Monday, July 10th 2006 for part 2: Make it Automatic.

Read my full review of the book, The Automatic Millionaire.  Pick a copy of it up at Amazon.

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