David, I understand the deathbed conversation Zoey has with her mother, about living a life of no regrets, is based on the last conversation you had with your own grandmother, Rose Bach, before she died. Could you share her story and how it shaped your life and your work?
My grandmother Rose was a remarkable woman. At thirty she made a decision that would change the destiny of our family forever: that decision was she didn’t want to be poor anymore.
At the time, she worked at the Gimbels department store in Milwaukee, Wisconsin, selling wigs. Neither she nor my grandfather Jack had a college education. They were your classic hardworking midwesterners, living paycheck to paycheck. Their life was a struggle. But my grandmother had a dream that their life could be better. So, starting on her thirtieth birthday, she told my grandfather, “It’s time for us to fix our lives. It’s time for us to save.”
Together, she and my grandfather began saving one dollar a week. Literally, one dollar. But she came to work and brown-bagged her lunch. Her friends teased her: “Oh, Rose, you’re so cheap! Come have lunch with us!” they would say. She said she was sad, at first, but she knew why she was saving. She wanted out of Milwaukee in the winters, where it was cold. She wanted to one day be able to retire to where it was warm.
Over her lifetime, through saving and investing, she became a self-made millionaire. And she passed her knowledge and love of investing forward—to me. She helped me buy my first stock at age seven (in McDonald’s, which at the time was my favorite restaurant in the whole world). She became my first money mentor. Ultimately, her teachings would shape my entire life, career, and purpose.
My first book, over twenty years ago, was Smart Women Finish Rich, and it was dedicated to her and the lessons I had learned from her. I started writing that book in 1997, and my grandma knew I was working on it. Unfortunately, that year at the age of eighty-six, my strong, healthy grandmother—who walked five miles a day and drank green juice every day, who outlived my grandfather by a decade and was dating three men three nights a week (which we didn’t learn about until later on, at her funeral!)—had a stroke.
After her stroke, we moved her from Laguna Beach, California, to a nursing care facility in the Bay Area, a mile from our office and where we lived, so we could visit her every day and watch over her care. I remember those final visits with her as if they were yesterday.
I asked my grandmother if she had any last life lessons for me. She thought about it for a moment, then said, “No, I’ve shared my life lessons with you. You’re going to do great in life.”
I then asked her if she had any regrets. She thought about that and said, “No—none.” And she went on to list all those things in her life that she was most grateful for.
The next morning I went to visit her again and asked her how she slept.
“Terribly,” she said. “I was up all night thinking about my life regrets—thank you very much!”
We laughed together, and then she held my hand as she walked me through her five regrets, going all the way back to when she was a teen. Then she said, “David, I want you to listen to me carefully now. My personal regrets are not the lesson. The lesson is why I have these regrets.
“At each moment I just shared with you, my life had come to a fork in the road, and I had to make a decision: Do I take the safe route, where I think I know the outcome? Or do I take the riskier route—the one where I hope the real gold lies, but the path to get there is uncertain?
“Do I take the risk to get what I really want?
“At each of those specific moments I just shared, those moments I now regret, I took the safe road. And now I lie here dying, and I will never know what could have happened.”
“But, Grandma,” I said, “you’ve had the most amazing life!”
She held my hand harder (even though she was quite weak) and said, “David, don’t have regrets later in life. Take the risk.
“And remember this,” she added. “When you get to your fork in the road, you will hear two voices: the big-boy voice that says, ‘Be safe, go the safe road!’ And the little-boy voice that says, ‘David, go this way! It’ll be fun! Let’s try!’ That voice, the little-boy voice, the one that’s excited and wants to play—let that little boy come out and play. And tell your friends to do the same.”
That was our last visit together.
I drove back to my office, parked the car in the underground parking garage, and cried deeply for a while. Finally, I looked up in the rearview mirror, wiped my tears away, and said, “I’m done. I’m not going to spend the rest of my life as a financial advisor at a large firm. I’m going to finish writing Smart Women Finish Rich and dedicate my life to helping more people in a bigger way. I don’t know how, but I promise you, Grandma, that within three years I will be out of this place and reaching for my dreams. I will let my little boy come out and play.”
In fact, it took four years, not three. But it happened. Exactly four years from that moment, I left the large financial services company where I worked and moved from California, where all my extended family and friends were, to New York City on a hope and a prayer that I could write more books and help millions of people with my grandmother Rose’s lessons on how to live rich and finish rich.
It wasn’t easy; in truth it was hard. And many things have gone wrong along the way—but I have no regrets. Much more has worked out well than I could have ever originally dreamed possible. Smart Women Finish Rich became a runaway bestseller and today has sold over a million copies. Five years later I appeared on The Oprah Winfrey Show, reaching tens of millions with my message.
That desire to have no regrets continues with this book.
For years, ever since that live show on Oprah where I taught the Latte Factor on her stage, I’ve wanted to write a little book like this one that explains the Latte Factor in a simple story anyone can read in a few hours, even those who wouldn’t normally read a book on money. But my publisher unfortunately wasn’t enthusiastic. Finally, after seven more books and my publisher continuing to pass on my little Latte Factor idea, I decided to write the book anyway and find a new publisher for it. Which is exactly what happened. And now it’s in your hands.
When Zoey’s mother tells her “Don’t live half your life. Live it all,” it becomes the trigger that motivates Zoey to stop living scared, stop living small, and go for a life of richness—which has very little to do with money and everything to do with living a life of no regrets.
The Latte Factor was never about the coffee, and not even about the money. It has always been a metaphor to motivate and inspire dreamers to go live their dreams.
No regrets. Let your “little girl” or “little boy” come out to play.
You could start today.
What’s next for you? Are you working on another book?
I tend to write one book, then promise myself and my wife (who has learned to ignore me on this) that that was it, I will never write another one. And the moment the book is truly finished and put to bed, often another idea pops up.
So the short answer is yes, I do plan to write another book, and it’s going to be a lot of fun—and, again, something completely different.
Within ninety days after we launch The Latte Factor, I’ll be moving across the Atlantic to spend a year with my family in Florence, Italy. I’m truly committed to living a life of no regrets, and I want my kids to have the experience of living in Italy and extensively traveling abroad before they go to college and are off creating their own lives. So if all goes as planned, by the time you read this, I will be living in Florence, eating pasta, drinking wine, and loving my daily gelato with my boys and wife—and writing another book, this one a memoir about my radical sabbatical. Just like Zoey.
I might even blog about it and podcast from there. You can join us on the journey at www.davidbach.com.
You’ve included some great charts and worksheets here; any additional thoughts on how to use them?
The first thing you’ll see are some of my favorite charts that highlight the miracle of compound interest. The first chart, “The Time Value of Money,” motivated me to start saving in my early twenties. Then, I’ve included a chart that shows interest rates varying from 2 through 12 percent (see page 137), so you can see the difference these returns make in how fast your money can potentially grow. Finally, there is a chart that blew my mind when I first saw it in my early twenties, that shows the annualized return of investments dating back to 1926 (see page 138). Don’t believe the critics who tell you that investing in the stock market doesn’t work anymore!
Following the charts, you’ll find a few simple worksheets that will help you take action. The first is what I call The Latte Factor Challenge™. For one day, carry this book with you and track your own Latte Factor. Just one day. Don’t change anything about how you spend money. Just be you. Spend like you normally do. Then go back through the day and add up all those expenses that are a Latte Factor in your mind. Run the numbers: Calculate what that daily savings could be worth if you changed just a few small things.
Then, on day two, take the Double Latte Factor Challenge. We don’t discuss this in this book, but it’s simple: Write down what you pay for monthly, then add that up and decide what you can cancel or reduce to cut your expenses faster.
If this is my first book of yours, which of your other books would you recommend I read next?
Without question, read The Automatic Millionaire first. This is the book I tell everyone to start with, and it’s my most popular book so far. It’s a fast, easy read that will show you what you need to do to become a millionaire—without a budget. Next, if you’re a woman, read Smart Women Finish Rich, and if you’re a couple, get Smart Couples Finish Rich. These books will help you explore your values, dreams, and life goals and build a personal financial plan to make them real. All three have recently been painstakingly updated in the American editions, so make sure you order the updated versions.
I wish I’d read this book twenty years ago! What if I’m in my forties, fifties, or beyond—is it too late to make the Latte Factor principles work for me?
The short answer is, it’s never too late to live rich and finish rich—provided you start today.
I wrote my book Start Late, Finish Rich specifically for people in exactly your position, people who’ve saved too little, or borrowed too much, or got sidetracked by life’s unexpected challenges. Starting late doesn’t mean you are doomed to an uncertain future. It’s never too late to live your dreams. All it takes is the decision to start.
The miracle of saving and investing is that money doesn’t know your age. It’s just math. Let’s say you’re fifty and married. Can you personally save $10 a day? Can your spouse or partner? Great; that’s $20 a day, times 365 days a year = $7,300. Invest that, earn 10 percent, and in twenty years you’ve got $461,696—nearly half a million dollars.
Double that, with each of you saving $20 a day, and that’s $14,600 a year; invested at 10 percent, and in twenty years that’s nearly a million dollars.
The most important part of working on a catch-up plan is to work on it—not worry on it. You are where you need to be today; now is your time to get started!
Any last thoughts? How can people get in touch with you?
Most importantly, thank you for being here and reading this!
One suggestion I would make is that this amazing journey Zoey grows through is an example of “you don’t have to do this by yourself.” Zoey finds mentors and makes new friends who encourage and support her dreams and new life. I recommend that you make your own Live Rich Now team—that you find others like yourself who might be inspired to take the Latte Factor journey with you.
A great way to start can be to get a group together and have a reading club where you all read The Latte Factor, then get together and talk about it. You can take the Latte Factor challenges together and support each other in your dreams. It can be life-changing when you do this with others you love or find new friends like yourself who want to live a richer life—and do this together.
If this book touches you, please feel free to email me at success@finishrich.com. I can’t promise a personal reply, but I do promise to read every single one. I love my readers, and I’m truly touched on a daily basis hearing from them. It’s my readers’ successes using the Latte Factor in their lives that have kept me on the journey of doing what I do for nearly twenty-five years now.
And please come visit me at www.davidbach.com. There’s a Latte Factor podcast on our website that is a continuation of this interview, which you can listen to for more great ideas. We also have a newsletter I write when I feel inspired; it’s my way of staying in touch with my readers. It’s free, and we don’t do the usual spammy thing and bug you with stuff to buy (until I put out a new book, of course *smile*).
Now, go put this little book to work in your life.
No regrets!