If you ever heard of David Bach, author of Automatic Millionaire, you should also heard of Latte Factor. It is his personal finance advise trademark which can lead you to become a millionaire automatically one day.
The Latte Factor
Survey First Before You Spend
It is end of the year and dining promotion is everywhere, especially for Christmas eve and New Year eve. I had a romantic dinner with my girlfriend on Christmas Eve but it do not come with cheap. I spend hundred ringgit for a one hour plus dinner on Christmas eve.
PTPTN Exemption For First Class Honor
In Budget 2010 announced on 23 Oct 2009, graduates who pass with first class honor will have their PTPTN loan waived. First class honor graduates do not need to pay back the loan again.
High Brokerage Fees
I had my first stock investment account with TA Securities. In my hometown, there are not many brokerage firms, just TA, Kenanga and OSK only. Recently, I just know that actually banks are doing stock trading too.
Ideal Salary Allocation?
I had been working for 2 months as temporary teacher. My salary increase from Rm1200 to Rm1900 after my graduation. With adding some allowance, my monthly salary will have slightly more than 2k. Wow, not bad. I am starting falling in love with my job. My salary rate per hour is around RM11.
I had been budgeting for my salary although yet receiving it. Craving for it! It always took a long time for the first time government worker to get paid. Usually will take around 3 months.
Live Below Your Means
Almost all financial expert give advise of to live below your means. In other words, spend less than your earn. If your monthly income is RM2000, you spend less than that amount each month. You don’t buy a 42” LCD TV which might cause around RM5000 or more by installment. This figure have exceed your income limit. A normal flat screen TV will be sufficient for watching. The stuff appear on the screen is exactly the same!
Live below your means definitely is a workable way to achieve financial freedom. You have extra money for saving and for investing in variety of investment. However, live below your means is a get-rich-slowly scheme. You build up your net worth cent by cent.
Inflation=Wealth Biggest Enemy
Inflation is our biggest enemy in building wealth. If you neglect the existence of inflation, you definitely end up being poor or middle. If you still wonder what inflation is, you may refer to my previous post.
Inflation is wealth stealer. It steal your money silently and unconsciously. You might not aware of your decreasing purchase power in one or two year times but it make a large different in long term, let say 10 years. 10 years ago, 1 plate of mee in my hometown sold for RM1.30. Now the same plate of mee sold for RM2.30. Nearly double! Price of goods doubled every 12 years with inflation rate 6% per years.
