I know, It has been a while since my last post about how to be a "Millionaire". Anyways, remember my last words in the previous part? Yes, it is all about "Patience".
I got many people who were asking and wondering when I am going to write about my second piece of work, and they sounded it, like I should write a series about it. Firstly, I am really grateful and proud that you have a genuine interest in reading my blog. I really appreciate that. Secondly, I am quite confident that the key words for such enthusiasm were:
"Millionaire" and "Automatically" , right?
Well, let me confess something. I don't have a magic formula for that, neither I think anyone does. But, I have come across a book for a reputable author that make things for me clearer and have more sense, when it comes to money management. This guy is called "DAVID BACH", and his lovely book is "THE AUTOMATIC MILLIONAIRE".
The things I like about this author, that he is first of all, a well known financial adviser, that has been interviewed many times in the TV, radio, newspapers and magazines, as a financial expert, that helps people to manage their wealth, especially those who are desperate for help. Also, he is an author of many best sellers, like "Finish Rich", and knows what he says, and not just selling dreams for the people. In short, the guy is damn good in his field, and particularly his book that I read, is far from complication, misleading, gambling, and most importantly, brain washing! He smartly starts his book by a disclaimer:
"..Let's be clear about something. I am not promising to transform your financial situation overnight......What you'll learn to become a millionaire- steadily and surely -over the course of your working life..."
Well said, isn't it? OK, let me share with you some key notes that I thought they are easy to understand, yet difficult to do by many people. His entire discussion is about being a millionaire and retire before the real age of retirements. So, his plans practically, for those who wish to be a millionaire over medium to long terms only. That's why patience is so much handy here!
First of all, he made it clear when he said that being rich IS NOT like showing rich, AT ALL! We can always find people that wear expensive clothes, drive luxurious cars, have wonderful vacations, but when you check their monthly financial statements, they are badly in debts, and live a pay-check to a pay-check. These type of people live their live as materialistic as possible, and wouldn't bother what to save or how their financial situation would be 5 years down the road. I call them Continuous In Debts people (CID).
Another interesting fact he talked about is the "Latte Factor". Basically, we might overlook unintentionally, our little expenses, just because they are tiny, and we might think that they have no big roles on our savings. Well, supported with figures and statistics, he again proved that if we manage to know what are our these little expenditures, that we do needlessly, we can have a lot of savings, in the future. A good example he gave, that I personally know many like to follow, is buying a coffee every morning from a big branded coffee shop chain. If you save half of that money everyday, and with a compounding interest factor, you can have an unexpected amount of money later on. So on so forth for other items. So it is all about finding your "Lattee Factor" and try to eliminate it from your daily or routine expenses, and the coffee was just an example, where he actually derived the word lattee from.
An interesting secret that David Bach revealed also was to do with the order of your expenses. He reckons that everyone should pay him/her self first, then subsequently, look into other things. We always say we will save by the end of this month, or I will try to spend only 80% of my income this month, and save the rest...etc. Actually, nothing, most of times work out, right? The concept of paying your self first is not a new one, to be honest, but I don't know why people still can't take this and do it! Simply, we should save every month, at least as a starting point, from 5% to 10% of our income. For example, if we earn every month $1,000, we should save something between 50 to 100 dollars, at least. People need to assume that they get only $900 and not the $1,000. Thus, they can accordingly adjust themselves better with their buying and other expenses.
See, all this is can be quite workable for anybody looking for a financial assistant, without a need for capital budgeting or any other fancy financial work around.
The book still rich of knowledge and easy techniques, and let us see if you can commit your self to what have been discussed so far..
I will give more tips in my third post..
Till that time, BE A REAL RICH and show them how much alive you are!
