Financial Freedom

Speaking of change… I often think about that quote –

“Insanity is doing the same thing over and over and expecting a different result.”

We want change for the better; but do we change?

Like everyone reading this review, I am not getting any younger, and like many of you, I survived the “Great Recession.”  Survive is the honest word and that’s frankly something any of us should be proud to tell our children or a stranger.  But, time marches on and I am looking to achieve financial freedom.

Zig Ziglar and Jim Rohn argued for decades about motivation and information – Zig suggested motivation was most important and Jim is credited with the famous quote –

“If you have an idiot and you motivate him, now you have a motivated idiot.”

In a way, both are correct, you need the motivation to change but also the information, knowledge and growth to make it meaningful and lasting.

David Bach’s book delivers enough knowledge and motivation to make a lasting difference if you want to improve your financial future.  You don’t have to be an economist or stock expert to implement his best ideas and improve your financial upside.  It’s easy to read, easy to learn and easy to apply.

For me, several of the chapters had an impact, but two chapters really stood out: Chapter 3 – Find Your Double Latte Factor and Chapter 8 – Pay yourself first…faster.  In both cases, I have heard the advice from others, but he helped crystalize the importance of each and better implement for results.  In the case of the Double Latte it was about focusing on converting wasteful spending into successful saving.  We all have joked about how much we spend eating out or drinking the fancy coffees. and how wasteful that is, but it’s not just about spending less.  David Bach argues that you should set a goal and invest a specific amount.  Don’t just save in one area and spend in another, find your double latte, figure out what you can save monthly and invest this amount immediately and over time consistently.

Paying yourself first…emphasizes aggressively paying yourself before you even pay your taxes. This doesn’t mean splurging on frivolous things because you deserve it, but rather investing in tax deferred plans such as 401ks and IRAs to the max before you even pay taxes.  Since these are pre-tax dollars, he shows how you can invest heavily, reduce your taxes and limit the impact on your “take home pay.”

These are just two of the many good ideas which he explains in easy to understand and apply to your financial life.  But I also liked his chapters on living a rich life and being more charitable. Making money to just collect is not the way to go – as they say, “you can’t take it with you,” right?

Each idea included the growth over time with compound interest based on a 10% rate of return.  I am not sure in this generation of low rates and volatility in the markets that 10% is truly realistic but … all the more reason to find creative ways to earn more, waste less and save your way to financial freedom.

Finally, I was in a closing with two partners this week, and one asked me the last book I read, I started talking about this book. The friend who asked the question, said

“Wow I need to read it… it sounds amazing.”

Meanwhile his friend, a financial planner, said, “It is a great book.  I have it and you can borrow my copy.”

Unless you are there already, pick up this book, read, apply and thank me in 30 years! Here’s to your financial freedom!

Posted in Financing:, Rich Reads.