The Latte factor by David Bach and John David Mann

In 1998 when David Bach wrote his first book ‘Smart women finish Rich’, it stayed on the bestseller lists for a decade. He went on to write a series of books under the Finish Rich Book series. This financial author, TV presenter, motivational speaker and entrepreneur sure knows a thing or two about entrepreneurship and making money and he doesn’t hide the secrets that he knows!


Author : David Bach and John David Mann
Originally Published : 2019
Publication : Atria Books
Pages : 160
Genre(s) :- Non-Fiction, Money Management, Budgeting

The Latte Factor is the story of Zoey, an editor at a world famous travel magazine, working in a posh Manhattan office in New York. She’s shaken by the words on an advertisement that shows a large ship with nets, stuck in a desert with the words ‘If you don’t know where you’re going, you may not like where you might not like where you end up’. That sets her mind racing for the direction of her life at 27. Living in a small apartment shared with a roommate, she didn’t even know if she could own it one day. Or travel the world for that matter or even own a car. Her heart is set on a beautiful photograph at the café .

She wants to take a new job that pays more and well, may even help her achieve her dreams. But when she speaks to her parents, the mother ends up saying money won’t make you happy while the father encourages. With advice from her boss, she comes and meets the café owner Henry. He connects the dots for her, allegorically telling her about Oculus in photography, which means figuring out where you want to stand and what you see from there which is the key to putting the right picture. He adds that she can but that photograph after all, for you’re always richer than you think !

How does ‘wealth’ happen

Not by earning more and more for you also end up spending more as you earn more. The three secrets to creating wealth are: 

  1. Pay yourself first – it’s not about spending on yourself or indulging but keeping aside one hour’s pay of every day for your own self. Keep aside a fixed amount, a percentage of your income for yourself before it gets taxed and see how it compounds. Keeping aside even $25 a day at 27 years of age, amounted to over three million by the time you’re 40 adding the interest. 
  2. Don’t budget, make it automatic – If you sit down to budget something, you will always end up worrying how and where the money will come from. But if you set an automatic deduction mechanism, the way our retirement plans cut out an amount from our gross salary, it just happens automatically without your intervention. 
  3. Live rich now- Figure out what matters and follow up with that. Live rich now and not in the far away future. You save for a future day instead of living rich today. 

The Latte factor

There was much criticism for Bach’s theory that the amount we save when we forego one Latte a day, which would cost maybe 5 dollars, ends up saving you a considerable amount at the end of the year. Some who said a latte costs much less completely missed the point. What it meant was simply put you can compound your savings when you start small but regular. A latte here, cigarettes, a drink that costs a good amount all are unwanted expenses or something you can do without. Don’t spend on those and you save a lot. It’s all about giving up something small to get up to something big. An outside lunch, bottled water, sugary juice, frequent coffee, extra cable channels we don’t watch, new clothes we hardly wear but just buy on impulse, all are expenses which can be avoided. And saved. 

Key takeaways

  1. Too often we wait for miracles to happen to make us rich but the secrets are not so difficult to grasp after all.
  2. More than budgeting and worrying your backs off to earn more money start planning for yourself first.
  3. Save and then spend.

Why I recommend this book

I would want you to read this book if you’re in your early years of job. That doesn’t mean to say that you should only live off your savings and not try to grow. It’s just that don’t delay life’s best things for a future day “when you’ll have enough money”. That day may not come. So live rich today. 

Read also to understand the importance of being in the present. A word of advice from me, though. Dream big and work towards it. It never hurt anyone. 

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