David Bach

People in Texas have a great way of describing someone who tries to look like more than he really is. They call him a “big hat, no cattle” guy. In other words, he may look like a wealthy rancher, but in fact, there´s no ranch, no cattle, no nothing. Just a big hat (and probably a fancy car). Every day, I meet people who look rich. You probably meet them too. They have nice clothes, drive nice cars, and sometimes even live in nice homes. But when you peel back their finances, what you find is that they don´t own what they wear or drive or live in. It´s all rented or paid for with plastic. All they really have is a heaping mound of credit card debt. What about you?< David Bach Before you can really start setting financial goals, you need to determine where you stand financially. David Bach People should take every opportunity they can to save money because it really adds up, and the best way I know to do that is to make your savings automatic. David Bach Learning to save is a lot like running a marathon — you need to build up to it by training gradually. It´s too overwhelming to go from saving nothing to saving $2,700 a month, so you need to start slowly and keep it simple. David Bach The fact that most of us are not raised to talk about money is a real tragedy.  Show me a couple who doesn´t talk about money and plan their finances together, and I will show you a couple headed for financial trouble — if they´re not already in it. When you work together on your finances, you can compound the results.  When you don´t, the same can be said for the mistakes you will invariably make. David Bach How many times have you heard someone say, "If only I could make a little more money, I could really get my financial act together?´" How many times have you said it yourself?  Ask most couples the source of their financial problems and they will tell you it´s that they don´t make enough money.  The truth is that most couples don´t have an income problem; what they have is a spending problem. David Bach Say you're going to close your account unless I get a better deal. In most cases, they will lower the rate on the spot. David Bach The biggest challenge for many consumers in going to a brokerage firm or opening a money-market account is that these accounts can require a minimum balance of $1,000, $5,000 or even $25,000. David Bach The truth about money management is that it´s not really that difficult.  If you know what to do and what not to do, it´s actually pretty easy.  The challenge is that we´re not taught about money in school.  As a result, much of what we learn comes from friends, word of mouth, and marketing.  This is why a lot of otherwise smart people spend their whole lives doing the wrong things with their money. David Bach A good friend of mine, Tom, had $15,000 in credit- card debt. I recommended to him that he go and buy a home anyway. Ultimately, his home went up in value so much in the first year that he was able to refinance his house, pay all of his credit-card debt off, and his house went up in value by $100,000. David Bach For most of us, debt can be a trap that forces us to work longer than we should have to. What puts us into debt are bad habits such as running up balances on our credit cards and then paying them down slowly, if at all. You can be hurt and held down by habits like these, or you can take action to break them. One of the most important lessons [to learn] is that Automatic Millionaires don´t do debt. David Bach This market right now is moving on nothing more than emotions. Guess what? It almost always moves on emotions. David Bach If you pay just the minimum due each month on an $8,400 credit balance, you will wind up having to make 365 monthly payments before it goes to zero. That´s thirty years and five months´ worth of payments. And that´s assuming you never charge another dime on the card, never get hit with a late fee, and are never billed for an annual service fee. Can you imagine it? Thirty years and five months´ worth of payments — and that´s for a card that charges 18 percent annual interest. Many cards charge much higher rates — some as high as 29 percent. Here´s the bottom line: You cannot become an Automatic Millionaire if you run up credit card balances and pay only the minimum due. All you´ll accomplish doing that is making the credit card company rich while you stay poor. David Bach Change is a funny thing.  Although most people say they want to change — so they can have a better life, with more love, more dreams, and more fun — the fact is that many of us are afraid of change.  Faced with the real prospect of it, we look at our lives and decide that being where we are right now isn´t so bad, after all.  Better the devil you know than the one you don´t, we tell ourselves. ...It´s a place where your life isn´t really that great, but it really isn´t that bad, either.  It´s just so-so. Well, I happen to think that life should be better than "not that bad" and more than "just so-so". Life should be exciting, challenging, and — ultimately — fulfilling. David Bach The more I study the wealthy.. in an effort to learn how to help more people around the world become one of them.. I´m stunned by how many people are actually not rich. David Bach Many of the success stories people have shared with me over the years focus on how homeownership has been the key to their financial security. I'm confident these essays will inspire millions of renters to work toward their first home and millions of current homeowners to consider second homes or investment properties as a road to building financial freedom. David Bach If you have any debt with an interest rate over 6%,the best investment you can make is to pay it down faster - it's a guaranteed return on your money that you can't earn anywhere else right now without risk. David Bach Financial education needs to become a part of our national curriculum and scoring systems so that it´s not just the rich kids that learn about money.. it´s all of us. David Bach The Five David Bach Questions: 1. Do you know your Latte Factor? (The Latte Factor® is based on the simple idea that all you need to do to finish rich is to look at the small things you spend your money on every day and see whether you could redirect that spending to yourself.) 2. Do you "Pay Yourself First"? 3. Have you made your financial plan automatic? 4. Do you own your home? 5. Do you tithe? David Bach