The Latte Factor By David Bach | Animated Book Summary #Best Education Page #Online Earning

When was the last time you thought about doing something you longed to do but

said to yourself that you simply couldn't afford it whether it's that

dream vacation to Asia or upgrading that old computer of yours all these things

cost money time and energy that most of us don't have but what if having the

financial means to achieve your dreams and save up enough money for retirement

were actually much easier than you thought in this video I will summarize

the key financial principles from the book the latte factor written by David

Barr by following Zoey a hard-working 27 year old woman with a good-paying job

that just can't seem to break out of the cycle of never having enough money to

achieve her goals that is until she meets a wise old man named Henry who

changes her life forever meet Zoe Zoe is a 27 year old

Brooklynite who works at a Travel Magazine while her job pays quite well

living in New York is expensive and between her high cost of living

credit card debt and student loans Zoe usually finds herself with little to no

money left in her bank account at month's end

unfortunately this lack of money is holding her back from pursuing her

dreams of taking photography classes and traveling around the world and when she

thinks about acting on these dreams she constantly finds herself saying I just

can't afford it one of the things that adds tremendous

joy to Zoe's life as her daily latte every morning on her way to work

Zoe stops in at her favorite coffee shop Helena's and grabs her latte one day she

noticed a beautiful picture hanging inside the coffee shop and went to check

it out she thought to herself it would be amazing to have this picture in my

home but when she saw the price tag she sighed as it was $1,200 which was much

more than she could afford the next day Zoe returned to the coffee shop and saw

an older man look at the painting the two of them began

chatting and he introduced himself as Henry

Zoe explained how fond she was of the painting but admitted that she couldn't

afford to buy it Henry then told her that if she could afford the cup of

coffee she was drinking then she could afford this beautiful picture surprised

Zoe listened on it was at this point that Henry began sharing his three

secrets of financial freedom with her the first of these secrets was that Zoe

had to start paying herself first this meant that instead of seeing if

there was any money left over for herself after all her expenses every

month she should commit to paying herself before anything else this also

meant that even before the state comes in and taxes her income she should put

some money aside for herself in a 401k retirement plan combine that with

compound interest henry added and the money would begin to add up just

committing five dollars a day to yourself with 10% compound interest

would mean a saving of one thousand eight hundred and eighty five dollars

after just one year and after 40 years nine hundred and forty eight thousand

six hundred and eleven dollars all for the cost of the latte in Zoe's hand

Zoe's mind started racing what if she also brought lunch to work from home

instead of spending money at the cafeteria how much could she accrue if

she changed her workweek spending habits and cut her daily expenses by

twenty-five dollars Henry's figure showed this would result in three point

four million dollars over forty years Zoe sure did have a lot to think about

the next day she found herself back at Helena's hoping that Henry would be

there so she could ask him more questions

you see Zoe loved the idea of her money compounding but admitted that she wasn't

the most disciplined spender it was at that point that Henry shared the second

secret to financial freedom don't budget make it automatic sure

budgets might work great for corporations

Henry explained but when it comes to individual financial planning it just

doesn't work in practice people are busy and don't have time to keep track of

every single financial transaction they make the solution Henry went on was to

set up an automatic payment system so that when she got her paycheck a portion

of that would automatically be transferred off the taxable and

spendable grid after all you can't spend money that you can't access right once

the automatic payment system was set up it would run itself it would require no

discipline or self-control Zoe was excited to have received another great

piece of advice but was still in shock at the power of compound interest that

Henry had talked about the day before however she heard from her friends that

earning 10% compound interest was a thing of the past and asked Henry if he

was wrong in his estimations Henry's answer was simple

since reliable market data collection began in 1926 the stock market has grown

by more than ten percent every year of course that depends on the year and the

market will always go up and down but even since the 2008 financial crisis the

trend has continued in fact the most conservative stock portfolio would

probably earn you around 8% per year Henry said that it doesn't matter if

it's five eight or ten percent the point is that compound interest applied on a

portion of your pre-tax income will grow bigger over time just make sure it

automatically comes out of your account every month at this point Zoe was

gaining more financial education than she ever expected she would but in

reality the learning had just begun as Zoe arrived at work she ran into her

boss Barbara Zoe began to share some of the knowledge that Henry had bestowed

upon her and Barbara couldn't help but add to Zoey's newfound financial wisdom

Barbara then began to share what she called the three myths of money the

first myth Barbara said is that making more money makes you richer while most

people think they have a problem with a lack of income the issue is usually more

that they have a problem with spending those who make more money usually just

end up spending more of it the solution to change the habits governing how you

spend the money you already have Barbara for example brought her own lunch to

work every day saving around fifteen dollars daily the second myth Barbara

explained is that one needs money to make money

Barbara had lost count of the amount of people who'd made remarks along those

lines to her as Henry had explained it can start with as little as five dollars

a day what's more Barbara went on is that you

don't have to be a mathematician or Wall Street investor to figure out how

compound interest works quite the contrary the goal with making money is

that it should happen by itself and that you don't need to concern yourself with

it all the time finally Barbara revealed the third myth

of money that someone else will be there for you to pull back on when times get

hard whether it's the government or your family at the end of the day you can't

always expect to have someone to help you out

this is especially the case for us women Barbara explained we often hope that

some Prince Charming will pop out of nowhere and swoop us off our feet when

times get rough but that's just a fairy tale Zooey needed to be her own Prince

Charming between Henry's two secrets of financial freedom and Barbara's three

myths of money Zoe was beginning to gain real confidence in her financial

abilities however come the end of the work week Zoe was eager to talk to Henry

again and learn the final secret of financial freedom

the next morning Zoe was back at and to her contentment so was Henry Zoey

asked Henry to share with her the final secret of financial freedom and Henry

happily obliged Henry started off by asking Zoey what was important to her

not in the future but right now after a bit of soul-searching Zoey said that she

would love to learn how to take amazing photographs and in the long term her

dream was to travel the world after all it's often made her sad that she worked

for a Travel Magazine but she herself had never left the country well Henry

replied it's time to put the third secret into action paying yourself first

and making that automatic are all well and good but you also have to live

financially free in the present how much does a good photography course cost

Henry inquired about $600 Zoe answered Henry smiled

Zoe needed to open up a dream account it seemed in addition to her 401k if she

set aside an additional $5 every day for six months she'd have enough to take the

photography course but would the dream account be enough for her globe-trotting

plans she'd still need to get enough time off work Henry then explained to

her the concept of the radical sabbatical which meant forging the time

for himself to travel to over 100 countries one of the first places he

went to was Greece in fact the very photo hanging in the coffee shop that

Zoe wanted to buy was of Mykonos Greece and had been taken by Henry himself

during his travels with the three secrets now in her grasp Zoe knew what

she needed to do first she sat down with her travel magazines HR guy and set up a

401k account then she opened to dream accounts one for her photography course

and one for travel finally she sat down with Barbara and asked if she could take

her own radical sabbatical once every year

she could even work remotely while abroad Barbara agreed on one condition

that Zoey sent her a postcard in summary the book the latte factor lays the

financial foundation that can make all of your dreams a reality through Henry's

stories we learn that to achieve financial freedom you must always pay

yourself first preferably into a pre-tax account next

leave budgeting by the wayside and instead automate your road to financial

freedom finally you should live like the rich now and in the future by opening up

dream accounts all in all there's no excuse for living an unstable financial

existence all you need to save is five dollars per day in other words the price

of a latte thanks for watching if you want to go from the life you have to the

life you deserve then hit the subscribe button now

English

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