Tuesday, September 29, 2009

Day #12: The Automatic Millionaire Workbook; Introduction pt 1

I read The Automatic Millionaire by David Bach a year ago (yay library!), and it was an amazing piece about saving and how to go about it.  It inspired me to purchase The Automatic Millionaire Workbook.

I thought that reviewing and working through each chapter would be a good exercise for me and a helpful insight for you.

Bach discusses the "American Dream" and how the baby boomer generation is not faring well with their savings and retirement accounts.  He continues with posing the question, "What's your idea of the American Dream?"

So then, what is my American Dream?

I want to live debt free (except a mortgage, or perhaps a car loan if the conditions are right).  After I retire, I hope to have income passively and work only when I want to.  I want to cook whatever kinds of food strike my fancy.  I'd like to travel to different parts of the world (United States, Western Europe, Iceland, New Zealand, Israel, Japan) and not worry about money. I'd like the equipment and space to compose and record, assuming I still have my wits about me.  Of course, I'd like to taste some of these wants before I retire so money management is very important now and in the future since my wants are rather expensive!

After this exercise is completed, Bach asks to fill out a table titled, "American Dream Snapshot"

What are your top three American Dreams?


What are your top three American Dreams?
What do you want?
What will it take?
Why is it important?
The equipment and space to record
$100,000
Music is my life, and I want to be able to create it anytime I want
Travel the world
$1 million
I'm not sure how much it will cost, but I feel that $1 mil should cover it!
Live comfortably without the need to work
$2 million
I want to be able to live on a small(ish) percentage of my retirement income (around 5%) so I won't have to worry about money.

Lastly, Bach wanted to have readers take "The Automatic Millionaire Truth Tester".

Habit
True or False?
What can I do to change it?
I buy things I can't afford
False

I often spent "some" of my paycheck before I even get it
False

I shop for fun, not because I need to
False

I say "yes" to new credit card offers
False

I only pay the minimum on my credit cards
False
I'm often late on my credit card payments
False
I don't balance my checkbook or check bank statements
False
I promise to save money every month, but don't
False
I don't save anything towards a down payment on a home
True
I am not thinking about purchasing a home soon anytime soon, but I know my 10% savings account will be part of that payment when it happens
I put money aside for future emergencies and I end up spending it
False


These exercises are a great beginning to looking at what your lifestyle is now and how you want it to be in the future.  Next post, I'll discuss the last half of the introduction!

«Laura»

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