If you’ve got it flaunt it! That’s the mantra that surrounds much of western society. Whether it is appearance, ability or assets – many people live to flaunt it! Especially when it comes to assets; many people spend more than they should and it costs them. They really don’t have the wealth they need or should have for the long term. So what’s the secret to having wealth? Most people want the short, easy answer. They don’t want to read a book, attend a class, or take the time to learn the power of good habits.
I hope that’s not you! Invest in learning. There is a secret to getting rich. It’s very simple. It’s so simple almost no one does it. It’s also kind of obvious. Chances are you’ve heard the answer before.
The wisest man who ever lived, king Solomon put it this way.
In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.
David Bach’s The Automatic Millionaire tells you the secret of becoming wealthy that uses this Biblical truth as its foundation. The answer to the question how to get rich? Pay yourself first! Don’t devour, or consume it all! Anyone can become a millionaire if you automatically, “Pay yourself first”.
Before living expenses, worrying about budgeting, taxes, or investing, get in the habit of paying yourself for the work you do. Set yourself up for success with automatic payroll deductions to a retirement savings plan.
Small daily amounts, what he calls the “Latte Factor” really add up. While teaching a personal finance class, Bach had a student who thought his ideas were good in theory, but not in practice. David stopped class and found out she was spending $5 every morning on a latte and a muffin. Lunch; eat out. So were snacks. It added up to $11.20 per day. Was this “flaunt it” lifestyle costing her?
At age 25, having coffee at home, bringing lunch and snack each day allowed her to save $150 a month, or almost $2,000 per year. At 10% return, at age 65, she’d have $1,200,000. If her company matched even 50% of her retirement savings, it would be $1,800,000. I love this book because it forever changes peoples’ minds about saving. By learning to save we create financial independence.
Most people have their own small daily expenditures that really don’t feel like a flaunting wealth act. I remember purchasing chocolate milk and a honey bun on the coffee truck at break, while I was a laborer. I deserved a nice break….right? I learned from Paulo, the bricklayer who said, “every time I want to spend money, I think of how much my fingers have to bleed to make it.” With that powerful image imbedded in my mind I became focused on how small things really add up. After all, he owned three homes in downtown Toronto worth more than 1 million each. What I really deserved was to pay myself first – not the milk and bun; something far better!
Change some of your own habits. Consider how your understanding will change your actions. Think of applying this to all of your earnings. Envision how much better off you would be.
Attitude We all have an attitude about saving, what’s yours?
Action Read or listen to this book to help you learn, understand and practice, the benefit of automatic saving.
Question Do you want to become a millionaire?
Resource The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach
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