Already, first off I agree with the “save 10% to become a millionaire”. Conventional wisdom says invest 10% to retire, 15% to retire comfortably and 20% to retire early. It’s right and you don’t need me to post all of the stats that are everywhere. Put the money in equity index funds when you’re young, then add a bond fund as you get older.

However, I disagree with Bach’s second statement, “don’t buy latte’s” (okay, bit of paraphrasing there) because not buying coffee doesn’t set you up for financial freedom. Planning your big purchases does. For example, if you buy a new car like me, you’re silly. You drive them off the lot and they’re worth half of what you just spent. And then look at the cash flying out the door, I spent $340/month paying off my car, so you’d need to make $6,000/year before taxes just to pay off your car. I could buy a latte every day and spend less than half this amount.

The fact is most people need to invest automatically, but they also need to realize that buying a $500,000 house on a ford focus budget doesn’t work. If you don’t plan your big purchases, you’re screwed. So spend less on your house and car, invest automatically and enjoy every day. You’ll be wealthy in no time and you didn’t even have to sacrifice every dinner, latte or movie to do it.

You can check out David Bach’s book if you want to spend money. Or you can re-read the two phrases at the start of the post. Pesonally, I’d read the start of the post and go enjoy the day, it’s better spent enjoying a latte.

-Craig Sharkton