David Bach's Automatic Millionaire

investing

Somebody once many moons ago told me to save 10% of my income. I didn't take him seriously and didn't think *I* could do it because I was always poor.

Later on I read David Bach's book and he said the same thing, so I guess he must have gotten this concept from David Bach.

Where David Bach got it wrong was he said to "Pay yourself first." this is wrong. you always give God your first and best right off the top. that's called a tithe (meaning tenth), and you pay it to your local church. If you want to do the other 10%, you pay that to investment account or savings off of the rest, and it would be a good idea to do that next.

in 2004 David Bach was quoting 10% annual return on retirement accounts. one web site is claiming that the best Roth IRA rates are (were?) at 30%. but another internet article states that what your roth IRA returns as a rate "depends" (here recently if you invested before a certain date you got -30% interest).

I saw the outlandish numbers, and I decided to calculate the 10% theory for myself. that part of the book content's hogwash (and the percentage yeilds are also invalid anymore). try the numbers out for yourself.

an emergency savings account?

actually, what the 10% concept is good for is saving money for an emergency savings account, the idea being that emergencies do come up once every while and you need to be prepared for them, and there is also the concept of saving 6 months of income in the case of a job outage. These type of things are taught in Christian Financial Management classes.

why?

Proverbs 27:1 Boast not thyself of to morrow; for thou knowest not what a day may bring forth.

KJV