The Automatic Millionaire teaches many important concepts and leads its readers on the path towards becoming future millionaires. The Automatic Millionaire shows how you can be a millionaire over time without self-discipline or budgeting. The three main concepts that I thought were the most important were the Latte Factor, and how it impacts our lives. The next is the “Automate for a Rainy Day” concept, and how you should always plan for a “Rainy Day”. Lastly, I’ll go into what tithing is and why it is important for all of us to commit to tithing.
The Latte Factor is one of the most important concepts in the Automatic Millionaire. It’s one of the key factors that ignite the path to becoming a millionaire. “The problem is not how much we earn …show more content…
This leads to the next concept: planning for a “Rainy Day.” A “Rainy Day” is basically a term for an emergency. This concept is also known as the “Sleep Well at Night” factor. I picked this concept because you can always plan for emergencies, but you’ll never know when an emergency will occur so in order to be prepared you need to set up an automatic emergency account. As the old saying goes; “it’s better to be safe than sorry.” No matter how much you plan, something can always go wrong that is out of your control. For example; the economy can boom or drop, stocks can fall drastically in a matter of hours, the loss of your job, or even the death of a family member. Either way, you need to an emergency account in case. “Cash is king. Cash is security. Cash is protection. Cash is your ‘take this job and shove it’ option.” (138) There are three rules to emergency money according to Bach. The first is finding out how much of a cushion you need, or how long/much emergency money you need at a minimum. As a minimum, Bach suggests three months of savings as a cushion, but he advises more if possible. The second rule is to not touch the money. It’s very easy to call every minor mishap an “emergency,” so judge it accordingly and be truthful to yourself. The third and final rule is to put it in the right place. You don’t want to bury your money in a suitcase. You want to put it into a savings account to earn interest while you’re not using the money. That way when an emergency comes forth, you’ll have even more money than you put into the account at the beginning. You can also invest in bonds, but you cannot immediately take out your cash without being
The Latte Factor is one of the most important concepts in the Automatic Millionaire. It’s one of the key factors that ignite the path to becoming a millionaire. “The problem is not how much we earn …show more content…
This leads to the next concept: planning for a “Rainy Day.” A “Rainy Day” is basically a term for an emergency. This concept is also known as the “Sleep Well at Night” factor. I picked this concept because you can always plan for emergencies, but you’ll never know when an emergency will occur so in order to be prepared you need to set up an automatic emergency account. As the old saying goes; “it’s better to be safe than sorry.” No matter how much you plan, something can always go wrong that is out of your control. For example; the economy can boom or drop, stocks can fall drastically in a matter of hours, the loss of your job, or even the death of a family member. Either way, you need to an emergency account in case. “Cash is king. Cash is security. Cash is protection. Cash is your ‘take this job and shove it’ option.” (138) There are three rules to emergency money according to Bach. The first is finding out how much of a cushion you need, or how long/much emergency money you need at a minimum. As a minimum, Bach suggests three months of savings as a cushion, but he advises more if possible. The second rule is to not touch the money. It’s very easy to call every minor mishap an “emergency,” so judge it accordingly and be truthful to yourself. The third and final rule is to put it in the right place. You don’t want to bury your money in a suitcase. You want to put it into a savings account to earn interest while you’re not using the money. That way when an emergency comes forth, you’ll have even more money than you put into the account at the beginning. You can also invest in bonds, but you cannot immediately take out your cash without being