Massey, David Bach, New York Times Bestselling discussed on Massey on Money

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Happy to have you with us for Massey on money as promised our conversation with David Bach I was able to sit down with David he's a financial educator a New York times bestselling author to learn about his newest book the latte factor and how the financial principles he writes about can help both baby boomers millennials and everyone in between so here is our conversation with David Bach right here on Messiaen money here's what ink had to say the latte factor will completely transform your relationship with money and happiness people magazine says about the latte factor a lot tastes burned is a fortune I heard you were going to get into that in just a minute David welcome back great to be with you thank you it's great to be back all right there is this feature story in the Wall Street journal and it talked about the millennial generation now this is an interesting generation they said that they're actually in worse financial shape than every preceding living generation and they may not recover financially there in such poor financial shape I thought this is a pretty concerning article you wrote this book the latte factor specifically for millennials and almost as a to change the direction of that generation financially so let's talk about some of the issues that you see millennials faced with today what's going on with them yeah I thought this article was actually starting because it's exactly why I wrote a lot he factor because what I've seen is that we have an entire generation big generation by way seventy seven million large when you take millennials in generations in generation Y. this generation is now up to a hundred million size is going to be bigger than baby boomer generation and yet this generation is starting a huge hole financially number one because you're coming out of school with record levels of student loans and this is something that never should have happened we have over one point five trillion dollars in student loans now you see millions coming out of school in their twenty thirty forty fifty thousand dollars in debt or more it's not uncommon enemy kids you've got a hundred thousand dollars in debt in their twenties they also have credit card debt so what's happening for this generation that happens to be by the way very sharp very smart and hard working is that many of them because if are trapped in this debt there's two things that they're not doing and they're the two escalators a build wealth America they are not buying homes because I don't think they can afford to and they're not investing stock market they're not using their four one K. plans and so you've got a generation falling behind in some cases ten fifteen twenty years behind and this is going to change the our economy I go for bases if something's not done about it because you can have an entire generation not buying homes not buy homes he's also not getting married and so there's a whole major economic potential lag to our country financially if we don't help this generation dig back out so I thought you know what can I do I know what should be done we should teach kids about money in school we don't but what can I personally David Bach do is I thought I'm gonna I'm gonna sit down and write a little story that anyone can read specially millennials that you can read it in an hour and really take charge your whole financial life to realize that there's still hope for you because we can have an entire generation giving up hope and that was my catalyst for writing this book it is small yet mighty this book I I did I read it in about an hour it packs a big big punch but I think about your previous books which I've read those were nonfiction books this is different let's share a little bit about why you told the story this way how will because first of all let's be totally honest here yes I've got seven million books out but ninety eight percent of people will never read a financial book it just won't but they need help funny actually then you know what to do financially so I thought budget packages in a little story that you know truthfully like my teenager would read I can reach a lot more people and select by the way my my son Jack who is here with us last time in studio he's read this book cover to cover he never read any of my other books he read this book cover to cover on a plane flight turned to me two weeks ago and said dad how do I open up an IRA account because you you read the story saw the charts and he's like I'm fifteen if I do this if I save my five dollars a day looking at the map that you have in this book that so we Daniels uses I could be a multi millionaire by Tom I'm sixty five I'm like I know you can look so let's go open this account for me so I can fifteen he's motivated and I just love I can take this story in packages up to weigh in on your baby boomers gives money to the kids and young people read this book quite didn't expect was that my nine year old would read the book the nine year old James is R. read the book and he's now motivated from his mom and I weigh mom sitting over here she's not on she's not on Mike but she's sitting here in the studio and we were both really shocked that the nine you'll read the book it resonates the stories powerful Zoli Daniels twenty seven year old she's a money all right she's the star of the show in this book she's the main character she goes through this story David she meets these incredible mentors one of them share is that there are these three secrets there's three secrets to financial freedom I wanted to go into those explain those three for us yes is genesis twenty seven she's living in New York City she's working in publishing each year should make a little more money but you sure she's spending more money two six years into this great career she's knocking wealthier in fact she still broke she comes to the office and she tells her first mentor her boss when in Barbara I can't afford anything like I'm just not getting ahead and barber sends her to meet another mentor who is ultimately is German named Henry and Henry works a coffee shop and Henry since her down starts going for some life lessons and won the first life lessons is well you have to pay yourself first are you paying yourself first she says what do you mean he's like well like when you're a patient can you come to work at nine you work from nine to five are you keeping the first hour day of your income she has absolutely no idea what he's talking about so he has to break it down for her and show her what that means yeah you need to save one I already have your income not through budging you need to save the money automatically it should go into your four one K. plan and yet do you have one at work she says yes is what do you use it nope which by the way so comment and so that's the first lesson he really drills into this idea that she needs to become financially selfish and put herself first the first person should think it's written a check from her paycheck because her and that's completely the opposite by the way what she's doing or how she was raised issues raised to not be selfish put others first yeah yes so it's a it's very different so that that first he is to pay yourself first which is a startling concept for a lot of people but she learns that first principle then they go into two more principles here without one she also learns that look you're gonna work ninety thousand hours of your lifetime and most Americans don't say fifteen minutes together in company shows of this on global chart the rights out for and then he says okay we'll look you probably think you need a budget she's a cashier but that all the time is it will how's that working for you she is terribly sorry at all it is I know it doesn't cause but you don't work and then he starts to teacher you need to save automatically for everything so it's not just for retirement you save automatically for your dreams of what do you want to do she starts to say well I work for travel mags and I never get to travel is like well then you need to be saving automatically for that trip and by learning to save this money automatically changes for whole perception of what is possible and gives her hope again and then the third lesson she learned is actually not all about retirement but how do you live rich now and so she's she's taught this life lesson of you our life should be built off your values and here's how you figure out what your values are because the very beginning the books you see is a story that says if you don't know where you're going you might not like where you end up and he helps her think about where is she going with her life and then how can she use money to get there which is so powerful I don't think people think about that they don't even know the right questions to ask in the story you you understand those questions what it really takes to find out what your goals are what your dreams truly are in the latte factor let's talk about the title of the book right it's actually in the Oxford dictionary out David this is a term you created this concept why is this phrase now so famous how do we apply to our lives so the logic factors being entered about now for two decades on it is a metaphor for how we spend small amounts of money a little things and I created to help people who say Dave I can't afford to save right like I was just as CNN by the way last week on Thursday doing a TV show and in the make up room I was going through these lessons with the person doing my make up right and I said will are you using your four one K. plans she said no I can afford to and actually she said they wanted a little bit so then she had a lot to a sitting right there right I believe that latte that you've just been five Bucks on if you could take that latte and by the way there's a bottle water right there that ten dollars if you take that extra ten dollars because I know they have free coffee it's in and I just had it if you save the ten dollars and you put it in your four one K. plan you would be saving three her dollars more a month and as if you did that between here in retirement you can have over a million dollars in savings and it blows people's minds doesn't it it blows people mines and so she's like but I don't I don't I love my coffee Starbucks might find and don't give up the coffee Starbucks give up something else on but here's what I know for a fact I said to her because she was sitting six percent of our income and she's single mom with two kids so I got tell you something you are not saving enough money so you need to figure out where to find this money because six percent is not going to get you financially where you need to be she said are you sure I said I'm positive I'm positive you.

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