Another book review! This time I review:
The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich
Is this book worth your time? Is it actionable? Will it really work?
Let me tell you. This is a great book. Has a lot of outstanding tips and tricks you can use and it will show you how to do it all automatic. There’s one catch..
You kinda have to figure out a lot of stuff yourself if you’re not an American citizen.
So far all these books are making me realize that there is still an open market in all the non-American countries. If you could write a book and make the actionable steps country specific and release it all over the world it could be a frickin’ goldmine!
Maybe once I’m more educated about this topic I can write a Dutch version with my own money system. Lets put a pin in that for now.
Back to the book review!
There are a lot of common principles in this book. All books are more or less fundamentally the same. The way that teach it or call it is just a little bit different. I think it’s important to find the book that fits your own learning style. Besides that it really doesn’t matter which book you pick up.
The principles in this book are:
- The Latte Factor
- Pay yourself first
- Make it automatic
- Automatic Emergency Fund
- Automatic mortgage payments
- Automatic debt-free lifestyle
- Automatic tithing
I’ll do the first 3 today and the others tomorrow.
The Latte Factor
This is a very simple, elegant and obvious method. It states that by skipping your Starbucks or whatever Latte in the morning and setting that money aside can make you a millionaire within 30 to 40 years.
It’s called the Latte factor but it’s not only limited to Lattes. It will help you figure out what part of your spending is your Latte Factor.
For example: Smoking can be yours or eating out. Too many evenings grabbing a beer or spending too much on cosmetics. Whatever it may be for you doesn’t really matter because the same rules apply.
On average spend $ 10 less each day and put it in mutual funds or some other investment that grosses about 6 to 10 % a year and make compound interest your best friend.
This is what will happen with that money if you do this for x amount of years.
Pay yourself first
Should I really get into this? Talked about this a few times already. I’ll just keep it short and explain it for those who have never heard of this before.
Most people get their salary pay off all their expenses and spend their money and if by chance anything is still left they will save it.
Like all the finance books will adamantly tell you. The first chunk of money has to go to you! Then you pay off all your stuff and whatever is left is for that month.
David (Bach) has a nice way of putting this that will probably wake up a lot of people.
He states it like this:
How many hours a day do you work for yourself? How much are you investing in yourself?
The advice he gives is that you should at least work one hour for yourself each day! Which is 12,5% if you work 8 hours a day.
Make it automatic
The book is called The Automatic Millionaire and this is where the automation part starts.
Setup some kind of automatic payment with your bank account that this 1 hour a day will automatically be redirected to your savings account.
This should be automatic because you do not want to rely on motivation or willpower. As we call it in the software development business: fire and forget.
I can actually do this within my banking app. Deposit x amount to my savings account on the last day of the month. If you can’t you can probably call your bank or visit them old school and set it up.
If you have irregular income you have to find another way to do this. I still haven’t quite figured out how to do this automatically for myself. If you guys have any tips please let me know in the comments below!
That’s it for today but I will continue tomorrow. See ya!
Yesterday was no spend Sunday!
Day 48 balance:
Expected expenses today:
Expected income today:
Current balance personal account:
Current balance business account:
– IRS: € 46.534,16
– Business: € 22.005,03
– Personal: € 9.374,58
Balance day 48:
– € 77.856,89
Started reading this financial book:
The Barefoot Investor: The Only Money Guide You’ll Ever Need
Page 148 of 884