If you want to test out your own financial habits against some recommended wealth building strategies, the answers may help you to start to build wealth in your lifetime. How is it possible that an ordinary couple on ordinary income built extraordinary wealth becoming multi-millionaires and retiring in their fifties?

This is the premise of the Automatic Millionaire by David Bach, one of 12 best-selling books in personal finance. The strategy he presents is not as far-fetched as the story appears.

Instead of focusing on growing your income, increasing your spending and looking rich, if you switch to saving money, investing wisely, you can become very rich – and sooner than you might think. It’s simple to read, but it seems difficult for people to implement in today’s increasingly materialism and credit-orientated culture.

As a regular on the Oprah Winfrey show, David Bach is no stranger to the personal finance industry, at least in the US. But what sets him apart from many experts are the straightforward strategies he shows, which anyone can do to become debt free and build wealth in your lifetime.

Here are six questions you can ask yourself to kick off your own personal wealth building strategies and finish rich in your lifetime.

1. Do you want to be rich?

This is not a trick question. But the real question is to ask yourself WHY you want to be rich.

If you get clear on your goals, you wake up hungry to make it happen and you’re more likely to do the work and make the sacrifices to achieve them.

2. Do you pay yourself first?

This is the number one financial decision, but few of us do it and certainly we don’t do it automatically. When you earn a dollar, the first person who should get paid is YOU. Pay yourself first means put money aside for your taxes, your retirement accounts, your savings, many of which are tax free!

The rule is to pay yourself one hour a day of your income – around 10-15% – invested automatically for life. (The average household actually puts away only 10 minutes worth of their earnings a day – around 2% – which is both shocking and scary.)

3. Do you know your Latte Factor?

The average American and probably European spends around $10 a day on incidental purchases, like buying a Latte and a pastry before, during and/or after work, maybe a pack of sandwiches or a salad and a drink over lunchtime. If it’s not that, it’s a magazine or an extra CD, grabbing some chocolate at the petrol station.

That $10 a day amounts to $3600/year (assuming that somehow you will have a latte factor not just on weekdays but weekends too). If you put that away instead, it really mounts up – and this will blow your mind.

Calculate it through at say 8% annual growth, over 35 years, that is actually a staggering $1,385,505 – over a million dollars – for coffee! Wait five more years, and that would be an unbelievable $2,108,569.

The strategy here is to become conscious of what your incidental ‘latte’ purchases are and reduce them or knock them out and instead pay yourself first with it.

4. Do you rent or own?

If paying yourself first is the number one financial decision, then the number one investment decision is buying your own home. It’s the top wealth creation strategy you can use. Home owners have a net worth of 40-50 times more than people who rent.

A secondary strategy is to pay your mortgage debt off as early by making over payments and thus saving enormous amounts of money on interest otherwise paid. But a third arm to this is that once you’ve paid about half off, use the equity to buy another property of the same value an rent it out.

For a 15 year long fixed rate mortgage, the interest rates are as low as they will probably ever be and it is easier than ever to benefit and build wealth in your lifetime. In fact, using a bi-weekly payment plan could save you over six figures in interest over 15 years!

5. Do you have debt?

If you are going to work really hard to make money, then you should make sure you have a plan to keep it! The only economy you can control is your personal economy, so reduce your debt by paying it off from the start and little by little. This is easier and less stressful than trying to pay off big lump sums.

6. Do you give back?

When your personal finances are stretched, it seems very hard to consider any level of tithing. But it’s a healthy habit and pays you back in so many ways. It’s another kind of wealth. When you feel happiness and satisfaction at a deeper level, you are far more open to opportunities you might otherwise never notice.

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