The Latte Factor is a phrase coined from finance guru David Bach. The idea being that you take the money spent on your daily latte, invest it, and voila, you’re a millionaire!
Works for me.
Except for one thing. I don’t drink lattes, daily. But that’s actually not the point. The point I do spend money on something. Money that could be working for me. But what? I don’t know!
I pack a lunch.
Last week was the first time I had a vending machine diet coke in months.
I shop at Goodwill.
I shop at Costco.
I drink water from my plastic, non BPA -lined reusable bottle.
I complain about lights and appliances being left on like a dad from the 1950’s.
Never owned a brand new car.
My kid wears hand-me-downs.
I recycle gift bags.
So starting tomorrow I will track all my expenses for 7 days and see what my latte factor turns out to be. Cause all the obvious things don’t apply to me. (In my opinion.)
I started listening to the Automatic Millionaire this afternoon. (Yes, I listen to audio books, learnin’ on the go!) And I’m feeling more hopeful in regards to figuring out my finances. I have been feeling pretty overwhelmed on the matter as of late. I need to do something. But what?
Oh I know, let’s do a budget! Cause I’ve been budgeting for 15 years and it’s worked out well and it makes me feel good and not like a total failure.
Bach says forget budgets. Okay, I’m a believer! To paraphrase “Any system that suppresses your normal human urges will not be successful. Humans like to be in control not be controlled. ”
Here’s what is crazy. Just last week I had this thought : If there was a way that I could save and invest my money first, then pay all my bills and do what I want with the rest I would be set. And that’s what this is.
David lays out 6 routes to accumulating wealth in this country.
1.) Win it
2.) Marry it
3.) Inherit it
4.) Sue for it
5.) Budget for it
6.) Pay yourself first
Of course, pay yourself first! Simple. I know this. But, I have no clue what this actually means or how to do it. Which is the point of the next 4 CDs. So, in the spirit of being action oriented I am going to track my expenses for one week. I actually don’t mind this considering a couple months ago I itemized my spending for like 3 weeks with no actual goal in mind! I did date, place item and cost on every. single. thing. And got nothing out of it! I learned nothing cause I didn’t know what to look for.
I feel like this author asks some good questions, is inspiring and most importantly, action-orientated.
As Bach says “Inspiration without action is merely entertainment.”