11 years ago, ‘The Automatic Millionaire’ taught me 4 crucial lessons about money I still use today
“The Automatic Millionaire” by David Bach is a personal finance bestseller with practical tips to cut spending and increase your savings.
He coined the term “The Latte Factor,” which points out that saving $5 per day on a habit like coffee, cigarettes, or even going out for lunch can add up to nearly $1 million over a 40-year career.
His book taught me that funding your retirement and other savings goals first helps guarantee you have a more comfortable financial future even if it adds an extra constraint today.
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“The Automatic Millionaire” by David Bach is a bestselling personal finance book first published in 2004. Updated in late 2016, the book offers a plethora of financial lessons that I wholeheartedly agree with.
In fact, this was the last book I read before launching my own personal finance blog back in 2008. To say it inspired me was an understatement!
But more important than inspiration, this book is packed with actionable, useful tips and lessons that are great for money novices and veterans alike. Here are some of the best lessons from “The Automatic Millionaire.”
1. Small purchases add up
The second chapter in the book, and one of the most important concepts espoused by David Bach, is “The Latte Factor.” The idea here is that small, regular purchases add up to huge amounts over time. Once you take interest into account, $5 per day on coffee costs a lot more than the $1,825 per year you pay directly.
While Bach takes a jab at the daily coffee shop visit in his book, the concept applies to eating lunch out instead of packing one, regular trips to happy hour, or any other recurring cost in your financial life.
2. Pay yourself first
Any regular reader of personal finance …read more
Source:: Business Insider