Automatic Wealth– Book Summary
Automatic Wealth author Michael Masterson tends to disagree to some extent with some of the financial pundits and financial books on how to get wealth. He believes that getting wealth is not a matter of scrimping and saving.
The author argues that David Bach, Latte Factor Way is not the right way. The latte factor is you tracking coins you use on coffee and chewing gum and saving them to get rich. Dr. Tom Stanley’s way taught in ‘The Millionaire Next Door” is not the way the wealth either.
“The Millionaire Next Door” is way of staying in a 40-year-old home, wearing resoled shoes, driving a second-hand truck, get your furniture reupholstered, carrying shopping list to grocery stores, and buying goods in bulk all in the name of saving money. All those are important and they work magic, but the reality of the matter is you’re not going to be wealthy as soon and enjoy it using those means.
Michael Masterson agrees that compound interest is great, nothing like it but it takes a long time.
It takes 30-40 years to use latte factor to get rich, and by the time you get there you’re too old to enjoy the fruit of your labor that is the sad reality (How old you’re plus 30-40 years). The Millionaire Fastlane author calls this wealth in a wheelchair. You can be clutching pennies until your fingers turn green you won’t be wealthy and the quality of your life and that of your family is messed up, and when you’re living paycheck to paycheck is even harder to wring a nickel out of your budget for retirement, much less the $5 or $10 per day that these financial gurus recommend.
In Automatic Wealth Michael Masterson says that scrimping and cutting corners are not ways to getting wealthy though it’s important. To get wealthy he recommends the following;
- Working harder,
- Generate extra cash
- Invest that extra cash to generate automatic streams of income in the future, a passive income sufficient to pay your basic needs and entertainment.
Life is good when you are doing something you love. If you have given up on something you value and care about reprise it and be willing to pay the price. Remember one day you’ll retire and you’ll have a lot of time but when that is invested in something that you care and love, your retirement will be fulfilling. Name Your Dream . . . Pick Your Price.
Never postponed to act, act immediately because time is always right to do what is right. Now is the best time to invest, not tomorrow, not next week and this doesn’t mean you act foolishly in haste but you have to understand there is only one time to begin an important journey. And that is now, immediately.
Be cognizant of the times we live in—the slowing economy, the burgeoning debt—but be equally aware of the passing of time. Every day you waste doing things that add no value to your life is 24 hours of opportunity you won’t have again. Use your time wisely and focus on the main thing. How you use your time determines how far you will go in life.
STEP 2: Plan To Become Wealthy
You don’t stumble on wealth, no one gets wealthy by accident. To be wealthy you must be intentional about it. You must do the job, not just being dreamy you have to be hard-pushing and not easygoing. Positive thinking is good, but there is no statistical evidence that equates positive thoughts with increasing someone’s net worth. It is how you act, not what you think, that will determine your success.
STEP 3: Develop Wealthy Habits
Learn and observe what wealthy builders do and follow their behavior patterns. What do they do when they get the money? How do they invest? What do they buy? To succeed, follow the recipe used by wealthy people. Success leaves clues. It is true to be rich one must follow certain behavior patterns.