Lessons
Introduction to Workshop
23:15 2Meet The Automatic Millionaire
11:10 3The Automatic Millionaire Blueprint (Make It Automatic)
25:34 4Find Your Latte Factor
24:42 5Couples & Money
10:02 6The Best Financial Apps & Tools
25:47 7Pay Yourself First!
20:46 8The 5 Biggest Retirement Account Mistakes
14:43Retirement Accounts & Investments
08:30 10Organize Your Money
15:28 11Crush Your Debt
21:45 12Learn Your Credit Score
16:49 13Be a Homeowner Not a Renter
21:11 14Create a Financial Protection Plan
10:26 15Build a Dream Account
04:43 16Grow Your Income
30:50 17The 6 Biggest Mistakes Investors Make
11:01 18Smart Women Finish Rich
21:37 19Your Purpose-Focused Financial Plan
17:42Lesson Info
Retirement Accounts & Investments
Want to talk about Turnkey solutions here. How should you invest the money in these plans? Okay. The first thing you should look at, inside your 401K plan, I'm sure CreativeLive's got this too, is target dated mutual funds. Target dated mutual funds do all the work for you and they make it automatic. So you plug, you look at your age and you say, "When do I want to retire?" And let's say you want to retire in 20 years. There is gonna be a target dated fund with that date. And that fund may say 2040. And that fund's going to have a certain amount of equity, certain amount of stocks versus bonds. It's gonna be totally diversified. Usually is gonna have at least eight, nine, ten funds inside of it. Someone's looking at it daily. It's automatically rebalanced over time for you. You don't have to do anything. As you get older it gets more conservative. It is a true set it and forget it investment plan. Should you go back and look at it? Definitely. But, the key with these plans I recommend ...
you pick a year that's five years sooner than when you think you're gonna retire. Because you may get a package that requires you to retire sooner and I'd rather see you more conservative as it gets closer to retirement. Look at the cost of these target dated funds. There's a lot of criticism about these funds. The criticism, for the most part, is wrong. Kay. The bulk of these target dated funds, the costs have come down substantially. The three biggest fund companies out there that do this, it's Fidelity, it's Vanguard, it's T. Rowe Price. The cost is typically less that 25 basis points. It's like one-fifth the price of a typical mutual fund. All done for you. More importantly, people who invest in target dated mutual funds, do better. If we just, we've already seen it now cause these funds have been around for a decade. They're doing better, because they didn't pick the allocation. They're not rebalancing themselves you have a professional person doing it for you. And they're substantially better, like often the returns are 2 or 3 percent better. Asset Allocation Funds, Balanced Funds, Simplified ETF Solutions. I want to show you my favorite, diversified, one-stop fund. This probably will not be, actually I'm sure it won't be in your 401K plan. But if you had a SEP IRA or an individual IRA account or you rolled over money, this is my one-stop fund solution. It is the Vanguard Star Fund. How many of you are familiar with Vanguard? Kay. Cause they're one of the largest, the largest financial service company, to do it directly, at the lowest cost. So Vanguard has their own asset allocation fund. So they built a diversified portfolio, it's been around since 1985. This is the symbol, VGSTX. Since 1985 it's averaged nine-point-one, nine-point-four percent. It is basically, what I would call a balanced account. It's roughly 60 percent equity and 40 percent bonds. Sometimes it's 65 percent equity and 35 percent bonds. It's made up of 11 Vanguard funds. So Vanguard's got 11 of their funds in this portfolio with an entire team of people building the diversified portfolio for you, rebalancing it automatically. Those are the 11 Vanguard funds that are inside this fund. Vanguard, I don't even need to read through them all, it doesn't matter. There's 18.7 billion dollars in this fund as of November. You've got basically a 20 billion dollar fund that has an annualized return since they started it of over nine percent. Automatically done for you. Cause what's the book called? Automatic "Automatic Millionaire" How are we trying to do this? Automatically. What's the goal? Simple. Low cost. Yes you can do it yourself. This is what I'm talking about here. Target dated fund example, I gave you. These are the three biggest ones. T. Rowe Price, Fidelity and Vanguard. They make up the bulk of target dated mutual funds. And, by the way, there's 700, last time I checked these numbers there were 786 billion dollars in target dated mutual funds. So it's the biggest growing solution inside 401K plans in America today. In "Start Late, Finish Rich" I talk about the perfect pie approach. Where I discuss one-third stocks, one-third guaranteed investments and one-third real estate. I still get asked all the time, do I like this approach too? Yes. This is my approach for all of your money. Not just your retirement account. So if your goal has you going, how do I want all of my money to look? If you have all of your net worth, one-third in real estate, which typically ends up being to start your home and investment properties. Could be retes also. One-third in guaranteed investments. That's gonna be bonds, CDs, treasure bills. Guaranteed. And one-third in stocks. Something's gonna always work. Cause again, I'm looking for singles. And then I need an asset protection plan and that includes my life insurance and my will, which I will go through in another lesson. Here's your homework today. Are you enrolled? Go back to that 401K plan, are you enrolled? Can you increase it? So, most of you here who have these plans you can increase it. That's what I want you to do. What's the company match? Make sure at a minimum you're maxing out the plan to get the full company match. But I want you to do more than that. The single worst advice you can ever be given and there are people who give it to you, is only contribute to your 401K plan up to your company match. That's perfect, if you want to worry about money for the rest of your life. Kay. (laughs) That's bad advice. You need to put way more than the minimum. Do they offer target dated mutual funds? I'm telling you, if they do, it's a great solution for you. One key thing with target dated mutual funds is don't do what a lot of people do, which is people choose two or three o four of them. To diversify again, that doesn't make any sense just choose one. (laughs) Do they offer financial planning services? A lot of companies are starting to offer financial planning services. One of the largest players, actually the largest player, is giving financial planning advice that's not from the firm, is financialengines.com You can check them out. See if the company that you work for is either offering that service. If they're not offering a service, find out if they're offering an advisor that will meet with you, that represents the 401K plan, cause they can sit down with you and go through the plan. Which takes me to the Automatic Millionaire Promise. So in "The Automatic Millionaire" I have this little worksheet that says, "I," and you insert your name. "hereby promise myself that starting this week I will work at least one hour a day for myself because I deserve it." That hour, I deserve it. I deserve that one hour a day of my income. "Therefore, I promise that I will start paying myself first" Insert gross percentage. What did I tell you the number was? 12 and a half Twelve and a half percent, this is a good class. "of my gross income no later than insert date." What date should you choose? How about like, tomorrow? (laughter) Kay. Some of you that are doing this at home you could do this today. Kay. The key here, my goal here today is not to be entertainment and education without action. Because education without action is not gonna change your life. Classes don't change your life, books don't change your life, action changes your life.
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Ratings and Reviews
user-ae5551
Wow! I wish they taught this in school and I would be in a better financial position in my life than I am today. However, I feel hopeful and empowered after watching David Bach speak and I am taking the first step by upping my 401k. I appreciate the realistic approach to wealth and not a get rich fast scheme we all too often hear and the esoteric approach to wealth/happiness that was discussed at the end. Wealth is truly freedom, not just being "rich". Thank you again David and Creative Live!
Jamie
As a self employed musician and artist, I have been a long time follower of David Bach! Every penny made as an artist counts, and David will help you make the most of it. This class and his books are life changing! I started following him 15 years ago. Financially I have had amazing years, and very rough years, which I know is very typical for artists and musicians. With David in my corner, I've always had peace of mind. From the beginning, when I was in deeply debt and couldn't even afford health insurance David gave me hope. Because of David's teachings, I now own my home free and clear, and have a nice retirement account building, as well as savings, and accounts growing for my children. While both my children are under the age of ten, I take every opportunity to teach my children how understanding money can free you to follow your dreams! A huge YES for this class! Thank you David!
Muniesh Khandelwal
S.M.A.R.T class. Action items well discussed. This is a must have class for those who want to move from a fixed mindset to growth mindset, literally through their own wealth portfolio. This class will show one the balanced pie approach towards wealth, it will challenge you to take action, and it will show you if one follows the strategies and takes actions, they will have a wealthy and a wise life. So glad at myself, that I invested my time to take this class
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