The Latte Factor: a book review

I first listened to David Bach on Rachel Hollis’s Rise podcast, number 98 “How Anyone Can Be Financially Free”. This was right around the time I had decided that I no longer wanted to be tied down by my debt. I wanted to take control of my finances instead of letting them dictate what I could or couldn’t do. So I set out on this path to financial freedom, with step one being: getting inspired. But enough about me, let’s get into the book.

I found myself drawing many comparisons to the main character in the book, Zoey. I too, like Zoey thought that the solution to my problems was more money. I also falsely believed that because I didn’t come from money, I couldn’t acquire wealth. Listening to this book has not only inspired me, but it has also motivated me to educate myself about money. David Bach’s three secrets to success as laid out in the book are the following:

Pay yourself first

In the book Zoey is advised to pay helfself first with the wages of an hour a day. Zoey sets up a retirement account through her job and makes contributions equal to what an hour a day is. For instance, if you make $10 an hour, you would contribute $70 a week or $140 every two weeks to your retirement account.

Don’t budget, make it automatic

In an earlier blog post I had mentioned how David Bach tells people that budgets don’t work. What actually works is making it automatic. But what does this even mean? It means setting your retirement contributions on automatic, setting your credit card payments to automatic, setting your bill payments to automatic and setting your savings goal to automatic. In the book Zoey is advised to do this the second her pay check clears in the bank. By setting everything to automatic you know exactly how much money you have left over, for day to day living. You are not tempted to live beyond your means because you never “see” that money in your account. It’s harder to “treat yourself” to a $400 purse on payday when you don’t actually have the funds for it in cash. 

Live rich NOW

Don’t wait for someday. Make someday, today. In the book Zoey kept thinking that if she only made more money, then someday she could afford to travel. The reality of it was that she was in a rut, repeating the same financial mistakes that kept her from advancing. There couldn’t have been a truer rap verse then Notorious B.I.G “It’s like the more money we come across the more problems we see.” The key is to make better decisions about how you spend your money. Zoey makes a list of what’s important to her and what will bring her true joy. She then sets out to live a life that only brings her true joy. Going back to the $400 purse, if having it brings you true joy, then go ahead and buy it. But don’t buy the purse, if what actually brings you true joy is to attend concerts.

If you need more convincing, read or listen to one of David Bach many books. I’m currently reading “Smart Women Finish Rich.” 

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