THE AUTOMATIC MILLIONAIRE SYSTEM WILL TRANSFORM YOU
THE MILLIONAIRE SYSTEM (From The Automatic Millionaire.)
(You can call your library to get on the list to reserve this book!)
Are you getting ahead or just running harder just to stay even? You need to
find Mentors: Successful people you can pattern your life after. How
to live like a Millionaire
If you don't have a mentor then read this and you will.
The Butterfly Effect- borrowed
from the idea of physics chaos, where the flapping wings of a butterfly in one
part of the world can affect the weather patterns in another part of the world.
You can accomplish amazing things with your life--even become a
millionaire--using a carefully designed system of focused actions delivered in
small increments or " flutter". By making small changes in
your attitude toward wealth you can become much more successful.
1.) “The Latte Factor.” All people have some spending habits that are draining their income and their
savings. For instance, getting an expensive cup of coffee every morning and
going out for lunch every day can quickly consume your income. $5 a day for
lunch X30 days =$150 you could invest. By realizing
what your particular spending habits are and correcting them, you are able to
save a great deal of money. His discussion of the "The Latte Factor"
shows that, to find money to start a retirement plan, a person with a modest
income needs to make an up-front commitment to stop accruing debt and to reduce
spending on such "wasteful" items as lattes and cigarettes.
Mathematically, it's possible to become a millionaire by saving a mere $1 a day
every day and letting the interest compound. If you can find investments that
will return 10%, you'll be a millionaire in 56 years. At lower rates of return
you'll still become a millionaire, but you'll have to wait longer. Don't want to
wait? Find something that pays better or put in more than a buck a day.
2.) “Pay Yourself First.” The money that people earn every day goes to a lot
of different people, but take some of your hard-earned pay
and keep it for yourself. Open a retirement account through
work, a bank, or a brokerage firm and allot the first ten percent of your
gross pay from each paycheck into the account.
3.) save for
a rainy day. Put away at least three months’ worth of living
expenses as an emergency fund that should not be touched for any reason except
for a real emergency. By doing this, you never have to worry about how you will
live if you lose your job or about finding some extra cash for an emergency.
4) buy a home.
Real estate has shown itself to be one of the best investments over time. By
owning a home, you increase your assets. Pay down your mortgage
early to save thousands of dollars.
5.) and most critical is to get out of debt and
stay that way. Credit card debt is ruining many
Americans today. Pay down your credit card debt—if you have
any—as quickly as possible and staying away from credit card debt from then
on.
finally giving back some part of what you earn through
tithing. Bach believes that part
of living and finishing rich is giving back a portion of what you have earned.
He suggests finding a worthy cause that you believe in and giving some of your
income to that cause.
It is not how much you earn but how much you spend that hurts you. How much you
earn has almost no bearing on whether or not you can build wealth. It is
not how much you earn, but how much you save that will make you rich.
- You don't have to make a lot of money to be rich. Regardless of the
size of you paycheck, you probably already make enough to become rich. We
all spend small amounts. People are more stressed when they have more
money- more expensive lifestyle to support.
- You don't need discipline; you need an automatic system so you can't
fail. Don't just hope you get rich. Decide at a young age to be rich and then create an automatic system for
wealth making it impossible to fail. Have your tithe come out automatically.
Pay your home mortgage bi monthly (automatically taken out) every 2 weeks.
You can shave years off of a mortgage loan, this way. When the house is paid, buy another house with the huge amount of equity you will have
and use the bi-monthly payment again. Or keep it to rent out.
- you don't have to be your own boss
- Track your expenses for a week to see where you are spending money. Use
the "Latte factor" to build fortune on a few dollars a day. Cut out wasteful
spending. Watch small stuff-like spending habits that you'd be better off
without--cigarettes, coffee. Save that money to buy a home. We don't think
about how many hours we had to work to earn the money that we so casually
spend on this or that. Even worse, we don't realize how much wealth we might
have if instead of wasting we invested just a little of it.
- Rich get rich because they pay themselves first. If you are serious
about being rich you will make sure to pay yourself 10% and strive to
contribute the maximum amount allowed into your retirement account. You had
to pay the government out of your paycheck last week and pay bills but how
much did you pay yourself by putting it in a savings account? Work at least
one hour a day for yourself by putting into your savings one hours income a
day. Try to save at least one hours worth of income each day. Start slowly,
if you need to and work up to where you want to be. Remember--this is your
future. The time to save for tomorrow is always today. Whatever you think
you can afford to pay yourself first for the future--do more. If you think
you can save 10%--save 12%. Have a portion of your pay taken out automatically and put in to savings.
Nothing will help you achieve wealth until you decide to pay yourself first,
which is the whole foundation of wealth building.
- Open your 401K at work or
get an IRA. Get a 401K (self-directed IRA) pretax so you don't have taxes
taken from your check before it goes to savings. The beauty of pretax
investing means you can save $5000 a year without giving yourself a pay cut.
How? (EX: If you earn $50,000 and have a tax rate of 30%, then you have
about $35,000 spendable income. you are saving that 45000 off the top. What
gets reduced is your gross income for tax purpose, which will drop from
$50,000 to $45,000. that $45,000, taxed at 30% leaves you with a spendable
income of $31,500. That is $3500 difference, not $5000. That is only about $290 a
month or $145 for each the husband and wife. It is also less than $5 a day
for each. you are saving that you don't have to pay any income tax on
money you put into the plan or any of the return it earns for you over the
years--not a cent until you take it out It can be done as a payroll
deduction. As on 2004 you can put as much as $13,000 a year into it (more if
you are over 50. Some companies offer to match a percentage of employee
contributions. By contributing deom each paycheck you can enjoy the miraculous
benefits of compound interest. You will get to enjoy the benefits of a
mathematical phenomenon most people don't really understand but everyone can
use to become rich--the miracle to compound interest. Normally the government
gets the first 30 cents from every dollar you earn, before you even see the
money, leaving you with 70 cents. A dollar in a 401K (pretax) earning
10% interest will be $1.10 in a year and the company may match it, making it
even more. But in a regular savings account it is taxable and will be worth
77c at the end of the year. This will keep you from paying taxes
on it allowing your savings to compound so you reach your goal
quicker. It is the legal way to pay yourself first instead of government, by
using pretax retirement account. If your company doesn't offer one, get an IRA!
Have it taken out automatically. Pretax retire plans are where al wealth
starts but in a Nov 2002 survey shows 1 out of 4 American workers who are
eligible for retirement account haven't even bothered to sign up! People
mistakenly assume that if their company offers a 401K or 403(b) retirement
plan that they are automatically included in it. this is almost NEVER the
case. contact your company benefits office. they will let you decide on a
dollar amount or a percentage.....choose the percentage! If
you don't have to think about it you won't notice it. You'd be amazed at how
effortlessly you can learn to live on less. You don't have to be dependent
on your government, your employer or even your family to have a stress free
life. With a simple automatic process you will save more than 90% of the
population! In order to pay yourself the process must be automatic. The only
plans that work are automatic. It will help you save 10% of income, month in
and month out. If you don't put it aside over the year, but wait until
December you probably don't have $5000 sitting around to now invest. Better
to have 10% automatically deducted from each paycheck, as you can't spend it
if you never have it. Invest it at 10% and in 35 years you will have well
over 1 million dollars! You will notice how good you are feeling, knowing
you are on track to be an automatic millionaire. the one change to your
financial life will ultimately change your financial destiny. most people
retire poor, dependent on social Security or family to survive. The fastest
way to become rich is to max out your 401K. In 2004 -you can put in 13,000
($16,000, if you are 50 or older.) 2005 $14,000 ($18,000 if 50 or over) and
in 2006 $15,000 ($20,000 if 50 or older). Other than buying a home, this one
decision can do more than any other action you may take in your life to
determine whether or not you will become rich. You will notice how good you
are feeling knowing you are on track to be an automatic millionaire. this
one change to your financial life will ultimately change your
financial destiny.
- Make sure you also have a rainy day fund.
- Automate everything financial in your life.
- Homeowners get rich, while renters or living in a trailer house will
assure that you end up poor. Own your own home! Owning a home
- Purchase with cash or don't buy! If you can't save up the
money beforehand what makes you think you will have it each month to pay on
a loan? If you have to use credit cards (in an emergency), pay your credit
cards off each month. People who show off trying to look wealthy will not
have money in the bank. They will be more stressed, affecting their health,
and may never get to retire.
- Never EVER, do a loan consolidation. This gets too many people in
trouble as they take on new debt when they think they have more money to
spend.
- Imagine your life 5 years from now. Where do you want to be? Write out your goals and plans and generally you wind up accomplishing
more than those who don't. (One of the big secrets of a millionaire! They do
teach this in college and most large corporations have their
employees write out long term and short term goals and how they plan to get
there.)
- TITHE- give back-err on the side of giving more than you think
you can and see what happens. a common thread found among the wealthy- some
of the worlds wealthiest tithed before they became rich. Sir
John Templeton, a billionaire many times over and one of the worlds greatest
inventors was a giver when he could barely afford rent. When he and his wife
earned $50 a week they paid themselves the first 50% and tithed 10% and they
always had plenty. Rockefeller children were taught from childhood that they
were to tithe and they all became very wealthy.
- Become Debt free (HOW
TO BE DEBT FREE)
To end up:
- Dead broke-spend more than you make, (If you are using a credit
card don't pay it off completely at the end of each month.)
- Poor- put a little in savings every now and then
- middle class pay yourself 5-10%
- Rich -pay yourself 15%-20%
- rich to retire at an early age -at least 20% (but try for more!)
Nearly 1/2 of all Americans have less than $25,000 in the bank and 60 million
(1 in 5) have nothing in the bank. The typical boomer has $1,000 worth of
financial assets.
If you have $2,000 in credit card debt and
making the minimum monthly payment it will take 18 years and
a total of more than $4,600 to pay off the balance.
If you want to buy a new car for $18,000 then you will have to actually make
$23,400 to pay for it since the government will take their share of 30% in
taxes to leave you the $18,000.
Don't forget if you then borrow the money at 7% it will cost you another $1260.00.
That $18,000 car (that will start depreciating as soon as you drive it
off the lot) will require you to make $24,660 to own it! (Don't forget your
insurance is going to go up and the tag is very high.) This is why millionaires
let someone else subsidize their cars....they buy them used so the first owner takes the big
hit as it depreciates. Buying
a Car
A way to make some extra money ebay
Careers
10 Golden Rules to hiring a financial planner and how to adjust a
high-consumption lifestyle or how to go about eliminating debt. http://www.finishrich.com/
If you are putting your money into CDs be sure you look outside your state.
Countrywide and Capital One, both FDIC insured, usually have much higher rates
of return. Their 3 year rate has been as high as many banks 5 year rate. Compare
at bankrate.com
Always take your grocery ads to Wal-Mart where they will price match. It
saves you running from store to store to get the best prices.
All that junk around your house can be turned into a way to possibly get back
money on your taxes when you take it to Goodwill and get a receipt! (It is
better than wasting time preparing for a garage sale and a whole day or two
sitting in the hot sun, to get 25c on items you spent much more for. When you
take it to Goodwill you will get to write off a much better amount.)
Once you realize that most people are keeping up appearances and putting on a
show, their approval becomes less important.