Monday, September 25, 2006

Lattes Anyone?

Does this sound like a strange topic for my blog? Well, I'll take a Tall, Skinny .... We all have our morning routines. Drive through coffee before sitting in gridlock, lunches out on Fridays with the office, drinks on Saturday with friends ... We have the things we spend money on, without even thinking of it. Have you ever stopped to think about how much you spend on these little routines ... it's just 1.25 for a coffee right? Have you added that up over the course of a year?

It's funny how we scruntinize in minute detail the money spent on building a business, buying a business or promoting a business but the order for a Latte is flying out of our mouths without consideration.

David Bach called this the Latte Factor ... for all those people who think they don't have money for a business, don't have money to invest, don't have money to make a better future for themselves all have one thing in common ... everyone has a latte factor.

Here's the deal I've made myself. For every Latte Factor or in Robert Kiyosaki's words, Doodads that I purchase, I make an equal contribution to three funds: savings, investing and tithing (more on this in a later post). That way, I really think about the things I am buying because it will cost me double ... once for the latte and once for the rainy day fund.

If you take the time to review your savings and your expenses, you might be surprised at how much money is slipping between your fingers. The trick is, once you identify the money, is getting it to work for you. And by working for you, I don't mean putting it into a savings account and watching it NOT GROW. I mean putting it into something that will generate long-term passive income.

So lets recap: identify your latte factor, know what you are spending on and try to divert it to other productive purchases ... then, invest those funds in a business or investment that brings you closer to your goals for early retirement.

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