Saturday, May 8, 2010

Start Over and Finish Rich!




The book of the week was Start Over and Finish Rich by David Bach. I just wrote this entire blog post and the internet deleted the whole things. Since I am on the road right now, I am going to give the cliff notes on what I just wrote. Bach is a great writer and I think he has fantastic ideas. Here is what you need to do to Finish Rich...

Pay off Your Bad Debt


Create a Snowball method to pay off your debt. Once you pay off one credit card, pay the next, and next... until they are all paid off. Start at square one and then only use credit cards if you have the ability to pay them off at the end of the month.

Emergency Savings


Build up 3-6 months of emergency living in a savings account. No risk and very liquid.

Retirement


Bach likes 401(k)s but I am not a big fan. I think you should max out any match your company offers with a 401(k) and then put the rest into a Roth. Historically, taxes have increased not decreased. So the hopes that you will be paying less in taxes later on in life is a little silly. We have Social Security, Medicare, and now, Universal Healthcare to pay for...

Make it Automatic


Make all your finances operate automatically. Have you check direct deposited, have all expenses pulled from checking and then have savings automatically deposited. If you have it set up right, you should be able to spend less than an hour a month on finances... leaving you time for more fun things!

Real Estate


One thing I really liked about Bach's book is that he encourages the idea of real estate investing. He likes the idea of having one mortgage on your personal home and then a second mortgage on a home to rent out. What a novel idea! There aren't a ton of books on real estate investing because it's super complicated, but because everyone wants to share their rags to riches story.

This was good. I really liked it. I would encourage anyone to add this to their library and use the ideas to increase their financial intelligence. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.




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