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How to Retire Early: The Latte Factor

Lesson 11 of 18

Retirement Plans & Where to start


How to Retire Early: The Latte Factor

Lesson 11 of 18

Retirement Plans & Where to start


Lesson Info

Retirement Plans & Where to start

These are the different amounts of money that you can put away today. Your retirement accounts. So we'll go through quickly. IRAs 41 K plan. Step by. Raise sold for one. K plans. This is the numbers. Now read stands for under age 50. Black stands for over age 50. Because of your older, there's a catch up provision. All of that is tax deductible. So I raised from K plans. That's how much you can put away question number one on a 41 K plan if you got one. Are you enrolled? Number one thing you need to do is be enrolled. You need to use it. You need to max it out 150 Endure age 50. It's $19,000. I want you saving an allergy of your income. Ideally, I want you maxing it out. I want you being obsessed with saving. You can't really over save and invest. You can always tap the money later. I don't want you to you leave it there. I don't want to borrow from it, but you gotta Maxie's plans out. Second thing is, if you're self employed, you need to open up a set fire. So self employed retirement...

account. It takes 10 minutes to open myself. Employer time account. All of you watching yourself employed you can save 25% your gross income up to $56,000. Last time I did this class people gave me lots of questions. Where'd Oh, I get it set by IRA. Every major brokerage firm. I'm gonna list him here in a second. Has a set fire? A. You could open them up in minutes online. You can also do what's called a solo 41 K plan. If you have a spouse member, just two of you, that's a great plan. You can put even same amount of money, ultimately maximum winds. But you can cram more money news plan for the lower income. So, like as an example, you could make $50,000 a side business and you could actually get $30,000 put away tax deductible. And so we're going. Wow. Yeah, lot employees have side businesses. If your side business is used for 10 years to fund a retirement account, you don't pay taxes on that money. It's all legal. You get rich a lot faster. These are the places that you go. These the four largest financial service companies that you go to at any moment online. Ameritrade, Schwab, Vanguard, Fidelity. You could do it yourself, or you can hire a R I a fiduciary toe work with you. They're furiously taking notes. Such a good sign. There are other firms. There are robo advisors, personal capital acorns. Some of you were using personal capital right now is your dashboard. To track where your money is going on your investments, they have probably one of the best cash boards you can use. A corns we talked about in the previous episode. Fantastic app. You can use to say small amounts of money. There's more. There's Wealthfront, another great firm. There's betterment. These are all the new robo advisors that make to first find your portfolio's online without an adviser. Very simple. I'm a big believer working with financial visors, but often people don't hire finance adviser until they have about 1/4 of a $1,000,000 in savings and they're ready to retire. So is your enough wealth accumulation phase. These could be great services for you to consider two years. If I were summarized, I would go back to earlier I showed you on that big white board. You're gonna work 90,000 hours. You got a 25 to 35 year career on average to save money. It is decades, not days. And the time to start is now. Now, I know that some of the questions air coming in that I haven't asked yet is. What about Ross? About Roth? Iran? Should I use a Roth Ira or should He's a Roth 41 K plan. These didn't exist 15 years ago, so all the retirement counts I showed you earlier Tax deductible. You put a dollar in, you don't pay taxes on it. Money grows tax deferred. When you go to take it out, you have to pay taxes on it. A Roth IRA. The money goes in after tax, but it grows tax free and it comes out tax frame. All things being equal, you have to choose. Do you want one or the other? What do you do both? Which do I like? I personally like the tax deductible one, because I just don't want to pay taxes as long as I can possibly not pay taxes. So I've put all my money in tax deductible retirement accounts. I started with that $2000 IRA account. I went to a 41 K plan. Then I had a set fire a banana sold for one K plan that I had a defined benefit plan. Have done a ball. I actually don't call five. A Roth IRA man comes to high because there's a limit Certain income. Not everybody qualifies for a Roth IRA. I'm gonna I r s dot gov and look at the limitations and every year, the updates because depending on what year you watch this, all this advice is timeless. But the laws change every year. A lot of people of Roth Foreign K plans, I recommend. If you are young and you can get yourself to say the same amount of money in a Roth that you wouldn't deductible IRA account, then God bless you. Go forward and put it in a Roth. But let me use dollars for a second here, $10,000 to put $10,000 deductible account. You don't pay tax on that money in the beginning, so $10,000 goes right to work to put $10,000 in a Roth. You actually had to make 15 because you have to pay five to get the 10 after tax. So basically you'll save 30% more in order to use a Roth IRA and have the numbers be the same. Does that make sense? Because it's a little complicated people could take. They take Roth IRAs and deductible IRAs, and they compare as apples to apples. And they're not, I recommend, with a foreign K plan of your work, and you've got both options. Go half into a deductible in half into a rock that you've covered two bases.

Class Description


  • Create financial freedom starting with as little as $5 a day
  • Learn how to earn 10% rates of return of your money
  • Understand the automatic millionaire habit that changes everything
  • Retire early or transition early to a life you dream of
  • Understand the FIRE movement and how to apply it to your financial future
  • Know how to become rich faster, as a freelancer or a small business owner
  • Use the Automatic Millionaire pyramid system to double your money in 10 years or less
  • Know which companies, apps and investments today are making managing your money easier and cheaper


What if you didn’t need to be rich to live rich? What if there were a way you could achieve financial independence and live your dreams now?

In less than five hours – The Latte Factor Class can help you take control over your money and your life. Whether you’re just starting out in business, an employee, or you’re in debt and you just want to live the life you’ve always dreamed of, “The Latte Factor” is a one day program that has inspired millions.

David Bach is the Author of The Latte Factor and the creator of The Latte Factor Method. He’s also a nine-time New York Times bestselling author of books including Start Late, Finish Rich and The Automatic Millionaire. In How to Retire Early: The Latte Factor, David Bach will teach you why you are richer than you think. He’ll help you see a future that puts you in control over your finances and back in the driver's seat of your dreams.

It’s never too late to start living your dreams; today is your starting point. Whether you are living paycheck to paycheck, or simply want to increase your net worth, this class is for you if you’re ready for a fresh outlook on life and money.


  • Anyone who wants to stop living paycheck to paycheck
  • Freelancers
  • Small business owners
  • People who want to live their dream life


David Bach is one of America’s favorite financial experts and bestselling financial authors of our time. He has taught millions to live and finish rich through his seminars, live events, courses and books. He’s the author of 9 New York Times best sellers, with over 7 million books in print in over 19 languages - including Smart Women Finish Rich, Smart Couples Finish Rich, and The Automatic Millionaire. He’s a media favorite having made thousands of appearances the past twenty years, including on Oprah six times and the Today Show over 100 times. David is the co-founder of AE Wealth Management and Director of Investor Education. His latest book is The Latte Factor: Why You Don’t Need To Be Rich To Live Rich. David presents seminars for and delivers keynote addresses to the world’s leading financial service firms, Fortune 500 companies, universities, and national conferences.


  1. Class Introduction

    You don’t need to work five side hustles for the next decades to achieve early retirement. You don’t need to live paycheck to paycheck for the rest of your life. Meet David Bach and learn how small amounts of money can change your life. David shares his personal finance story starting from age 7.

  2. My Start in Investing and Teaching

    What did David’s first “financial advisor” teach him? Why is it so critical that women in particular begin their retirement planning now? David shares his investment history what you’ll learn in his book, The Latte Factor: Why You Don’t Need To Be Rich To Live Rich is about.

  3. Financial Education - Know Better To Do Better

    In this lesson, David paints a picture of the dire necessity of financial education for Americans. Learn about the mindset necessary for a happy retirement, how companies force employees out of work in their 50s, what rich people now that poor people don’t and how credit card companies prey on consumers. David lays out exactly what you will learn in this class.

  4. Start Early, Start Today

    Early retirees don’t all start with six or seven digit annual incomes -- most started saving and investing early. David shares a comparison of how early planning can immensely impact your retirement savings.

  5. The Latte Factor: How It Works

    What exactly is the latte factor and how can you find yours? In this class, David breaks down the latte factor math and shows you how to save money by cutting out small non essential living expenses and developing a daily mindset geared toward retirement. He also shares his pick of online resources and apps that aid in financial planning and investing.

  6. Student Success Story

    Hear directly from Elizabeth, a member of David’s inside team regarding her financial planning journey over the past 18 months.

  7. FITE - Financial Independence to Transition Early

    Learn about the FIRE movement and David’s take on transitioning vs retiring. David reviews how to plan backwards from your desired retirement age, introduces the 50/20 formula and shows the effect of turbocharging your income stream.

  8. Common Investment Mistakes

    Don’t make these common investment mistakes that won’t yield extra income. David gives advice on buying a car.

  9. Becoming Rich on an Ordinary Income

    You don’t need that much money to become rich or build up a nest egg. David shares research from Fidelity Investments that shows the concrete steps to take to become a millionaire through 401k investments.

  10. How Much do You Need to Retire

    How much should you save and invest or, as David says, pay yourself? See what you should be saving at 30, 35, 40, 45, etc.

  11. Retirement Plans & Where to start

    David orients you to the different types of retirement accounts available, highlighting their benefits depending on your needs. Learn the difference between a traditional vs. Roth IRA, spousal IRA, SEP IRA, 401k and solo 401k plan. What is recommended if you’re self-employed? What if you have employees? David answers your questions and points to brokerages, roboadvisors and apps where you can start.

  12. How to Earn 10%

    There’s a lot of talk about earning a 10% return on your investments -- how do you actually do it? David teaches you the rule of 72, a quick way to calculate how long it takes to double your money when calculations and retirement calculators aren’t at hand. David takes audience questions, addressing financial planning in relationships, investing while in debt, and his advice for self-employment.

  13. Investment Pyramid

    The opportunities for investment can seem overwhelming and intimidating; David presents an “investment pyramid”, displaying all investment options from low to high risk. Learn what makes a diversified portfolio and what David himself invests in. Lastly, David cautions against the high-risk investment zone and which investments to stay away from.

  14. Reasons Most Investments Fail

    In this lesson, David shares the top 4 reasons most investors fail; learn what not to do. See a historical representation of an investment from 1926 through today and learn why the stock market will always favor a “boring” investor.

  15. 5 Things to do During Market Correction

    Market corrections are normal and happen throughout history. David advises on what to do on your own or with your financial planner or advisor.

  16. Retirement Accounts and Investments

    What are target dated mutual funds, asset allocation funds, balanced funds and simplified ETF solutions? Why are they ideal investments? Which Vanguard fund does David recommend? David gives you homework in this class: crucial questions to ask yourself and actions regarding your 401k.

  17. Renting vs Home Ownership

    Why is real estate one of the best investments you can make in your future? David shares benefits and advice regarding mortgages, payment plans, bubble-proofing your real estate and how to become an automatic millionaire homeowner.

  18. Why Your Dreams Matter

    David closes, returning to the point of financial freedom: to live your dreams. He gives advice on different investments to consider depending on your time frame and how to plan a sabbatical. He ends the class with your final coursework: finding your latte factor and putting steps into place to start paying yourself first.


Ling Fan

Great class! Concise and powerful! Wish I knew this 10 years ago.

Kennie Johnson

Very helpful and inspiring

Carlos Figueiredo

I thoroughly enjoyed the course love it!