Hark from the tomb of a dead nation!

Good news! After a long drought, I have finally finished A Connecticut Yankee in King Arthur’s Court.

I loved it. Mark Twain is absolutely perfect summer reading. His books just make me want to build a tree house and raft down the Mississippi and pretend to be a knight. I’ve decided that Twain is the Pinnacle of American Literature. Why? He wrote about all things American. Even ACYiKAC, which is set in old England, is full of AMERICAN commentary about the customs, the Church, the political structure, and how Americans do it better, basically. It was fun to read and probably wildly offensive to English people.

(Author’s side note: I just took a second to look up critical reception to the book, and, according to SparkNotes, “The British especially took offense at the novel, feeling that it maligned their history and culture and disgraced the ideals of King Arthur and his Round Table.” Perhaps they were especially offended by this quote:

“I had inherited the idea that human daws who can consent to masquerade in the peacock shams of inherited dignities and unearned titles, are of no good but to be laughed at.”

Haha! Take that, you tea-slurping redcoats!)

Twain’s writing was so snarky and chock-full of sarcasm. I am guilty of skimming when I read, but it’s impossible to do with old Marky Mark, because every paragraph has a joke jammed in there somewhere. Beauty!

Anyway. I recommend this book! And a final quote!

“You see, my kind of loyalty was loyalty to one’s country, not to its or its office-holders. The country is the real thing, the substantial thing, the eternal thing; it is the thing to watch over, and care for, and be loyal to; institutions are extraneous, they are its mere clothing, and clothing can wear out, become ragged, cease to be comfortable, cease to protect the body from winter, disease, and death. To be loyal to rags, to worship rags, to die for rags—that is a loyalty of unreason, it is pure animal; it belongs to monarchy, was invented by monarchy; let monarchy keep it.”

Oh, one final thing: there was a movie made of this, in 1948, with Bing Crosby in the lead. Has anyone seen it? I’m curious.

P.S. What happened to the word cloud?

ALL ANIMALS ARE EQUAL-BUT SOME ANIMALS ARE MORE EQUAL THAN OTHERS

Obviously this is the picture I would choose to use with Animal Farm, but when I saw the thumbnail I thought it would be something totally unrelated. But it says by George Orwell, maybe I'm an idiot but I didn't read anything about the animals tying up a cosmicly enhanced blonde, and there definatly wasn't a leopard/jaguar anywhere in the book. I know this for sure because my grandma has a jaguar so I'd certainly remember, pun intended. So I must conclude that this was made by some commie lover, because you can't love Stalin and Orwell. This book was fine, Luke was right it's not very cheery but I hate commies so I enjoyed their depiction as pigs. What I want now is to research the rise of communist Russia to see which characters are which in Animal Farm. I'm most interested in who Snowball is supposed to be and if he really left the country and they still blamed everything bad that happened on him. Also to see if it was really that horrible. Now I'm onto 1984, "at least I think it's 1984"

Don't Bother Reading This...Unless you are actually interested in motivational finance books.

Meeting the Automatic Millionaire

In this chapter we meet Jim and Sue McIntyre. Jim is in David Bach’s class and asks for a consultation on his retirement. David is certain Jim is too young to retire and expects to tell him so but is surprised to find out that David and Sue’s net worth is close to 2 million dollars. Once David finds that out Jim and Sue proceed to outline how they became automatic millionaires through saving a couple dollars a day, paying off their mortgage, staying out of debt, and renting their first house out.

The Latte Factor: Becoming an Automatic Millionaire on Just a Few Dollars a Day

The author talks about how much money one can save by just saving a couple dollars a day. He talks about how “The Latte Factor” was invented in one of his classes when a girl said she could not possibly save any money and he walked her through how much she spends in just one day ($11 or $12). He also talks about how much money you can make by saving a small amount now and how compound interest can add that up to be a much bigger sum in the future.

Learn to Pay Yourself First

The author says that the only way to get rich is to “Pay Yourself First”. If you want to be broke spend more than you earn and never think of saving. If you want to be poor spend all you have and just think that one day you will save. If you want to be middle class then you have to save five to ten percent of your income. If you want to be upper class then you have to save ten to fifteen percent of your income. If you want to be very rich and retire early then you have to save at least twenty percent of your income. He says that too many people pay the government and everyone else first, but if people would invest in a 401k or other pre-tax investments they could become an automatic millionaire.

Now Make It Automatic

It is important to start a 401(k) or an IRA as soon as possible and to max out the contributions as often as possible. There are many different options to start a retirement fund such one of which is a new 401(k) single investor plan for self-employed people. Under this plan the investor can save up to twenty five percent of their income. That is why business owners get rich quicker than average workers. The best way to invest ones retirement is to make a simple diversified portfolio. The chapter had an investment pyramid with safe investments on the bottom and risky investments at the top. The younger you are the more risky investments you can take on, but if you are older you should stick with the safe investments. Whatever happens it is important to funnel at least ten percent of your income into an investment plan automatically. If you don’t make it automatic it won’t happen. That is the difference between someone living paycheck to paycheck and an automatic millionaire.

Automate for a Rainy Day

It is good to save at least three months of expenses for a rainy day. It should be in a separate account that is used only for emergencies. Having emergency savings without interest is just as bad as burying your money in the backyard in a suitcase (like Frank and his xenophobic wife). Buying savings bonds or putting money in a stable money market account or both can be good options. He says that if you are in debt it would be more productive to first only save one months worth of expenses and use the rest of the money to pay your debt. He points out that if you are saving at 2% interest but paying 12% interest on credit card debt it just doesn’t make sense.

Automatic Debt-Free Homeownership

It’s good to own rather than rent. If you rent you spend a bunch of money and end up with nothing; whereas, you could have been paying a mortgage and have a home or at least equity. The best way to accelerate owning a home is bi-weekly payments on your mortgage this way you add an extra payment a year. It costs a fee though. If you want to do it fee free you can add 10% to each payment you currently make or make an extra payment a year. It’s important to make sure there aren’t any penalties for paying early. Sometimes they want you to write a letter or pay the fund separately, but if you do it you can pay your mortgage off years early and build equity.

The Automatic Debt-Free Lifestyle

You can’t be an automatic millionaire if you have credit card debt. Many Americans are, “Big Hat, No Cattle” people or in other words they look rich, but they don’t really have that much money. The author suggests that if you are in debt it is worth it to split your “Pay Yourself First” money in half and use half of it to DOLP (Dead On Last Payment) all of your credit cards by prioritizing debt and paying all of it off. If you have a credit card problem you shouldn’t keep credit cards with you. When a store offers credit to save money you should always say no. Shop around for low interest rates and consolidate debt in order to pay it off quickly.

Make a Difference with Automatic Tithing

Tithing is a good way to give back and feel good today. There are many ways to donate. You can use a new mutual fund or just cut a check. Its important to make sure the organization you donate to actually uses the money. The author had an experience where he donated to a company and found out later only 40% made it through. You should aim for a company that passes about 75% through and definitely avoid any company 50% or less. Many very wealthy people donated money long before they ever became rich. It is possible to make tithing automatic. It is also a good idea to keep track of charitable donations for tax purposes.

Conclusion

I really enjoyed this book. It inspired me to think about my own “Latte Factor”. I do not know how exactly I can implement the “Pay Yourself First” method, because I do not have a very steady income, but I am definitely going to keep it in mind for the future. The part about credit card debt was a bit over my head because I do not have any debt, but I consider that a good thing. I didn’t like the way the author wrote to me as if I was inferior and unintelligent. He was very patronizing. Then again, I am pretty unintelligent when it comes to finances so perhaps that was just my bruised pride. The quote I liked the most from this book was: “The Automatic Millionaire is not about getting rich overnight. You don’t get rich in days; you get rich in decades by creating a system that makes it so that you literally can’t fail. ” To me this quote sums up the message of this book and the reason I liked it. It’s not about getting rich over-night; it’s about obtaining financial stability and feeling that sense of security that comes with it.