Skip to main content

How to Retire Early: The Latte Factor

Lesson 4 of 18

Start Early, Start Today


How to Retire Early: The Latte Factor

Lesson 4 of 18

Start Early, Start Today


Lesson Info

Start Early, Start Today

This is what happened to me to change my life. I saw a chart. I saw a chart, those in the book, the lot a factor. And this chart was handed to me in training to be a financial adviser. So in I worked in the World Trade Center. That's where the training glass Waas I worked at Dean Witter Reynolds, which became Morgan Stanley. I lived in New York City and is a part of training financial virus who have been successful come through and they share their wisdom. So this gentleman came through and he said, and he basically spoke for an hour and he said, Now here's the thing, All of you in this room, all of you young kids He said, I know you're not gonna remember anything I just said, but I want you to remember this. He said, I want you to take the chart out that I handed to you this chart he said, Notice that if you were to save $2000 a year and you started it in 19 if you were to save $2000 a year starting at 19 and never put, just save until 26 never put another dollar away in an IRA accou...

nt. Thats the reason is 2000 is. That's what the irate tax rules were in 1993 and you just left. Never put our dollars just left alone. At 65 you could have over $1,035, he said. Now, is anybody in the room? 19? Nobody rules he said. How many were in the rumor? 26? A lot of this work. A lot of young guys in this room I was was actually 27 36 in the ones, too. Yeah, he said. If you go and save $2000 and you do this every year until 65 you're also going to do very well. You're gonna $883,000 still out money. It's very interesting that you notice that this person doesn't catch up. This person saved every single year and doesn't catch this person. This, by the way, I'm gonna get off camera for a second. This is the chart that my son, who's 15 looked at it and said, Wait out, I'm I'm not 19 15 you need a new chart. Yeah, actually, that charters in one of my other books, you need a new chart that shows 15 but he's like, so all have what? Well, I have my you'll actually have over two million. So he took his calculator out. He goes $2000 a year, his $5.41. That actually is the price of a cup of coffee that actually is a lot of actor. So I'm 27 on like I have to a least. So he says at a bare minimum, guys and some gals you need go open up an IRA account and put at least $2000 a year away because you'll get to 65 you'll have some financial security. And they said, Look, we make a ton of money being a financial watches. That's why you're all here. There's no reason for you to save $2000. You should be saving 10 times this ultimate. Ultimately, you should have millions of dollars by the time your retirement. But then he says something that's immediately got my attention, he said. But let me tell you a little dirty secret about the financial service industry, he said. Most financial waters don't have a pot to piss in, he said. So when you go back to your office and the average adviser in that office, who acts like they know everything, who's in their fifties, they're broke. They're broke because it's like the cobblers. Kids have no shoes. They did. They helped their clients manage money. Who did everything right, but they're not doing everything right, he said. I'm 61. I'm retiring next week and he goes, You know why I'm retiring at 61? Because I'm rich and I can And I've worked with all these retirees in bunch of them dropped dead in her sixties. And so I'm done in Today's my farewell party, and it was like he dropped the mike and he's like and all of you can be rich, too, and everybody in the room stood up and gave this guy a standing ovation. And he said to take this chart back and use it and then show what your clients can get their kids involved. Nobody got standing ovations and training, but that little chart was the catalyst that got me paying myself first in using IRA account. This was the second chart similar idea showing you what happens when you start early or when you wait. So this chart shows the mat checks $300 a month. That's how much a day, by the way, $10. Most people can save $10 a day. Would you agree? How many would be that most people could sit most, if not everybody? Most people who save $10 day yes, Okay, 25 at 65 with 10% rate of return is $1,913,000. That's what. Wow! Now wait till you're 35 in $684,000. Wait until you're 45. It's $230,000. Wait until you're 55. It's $62,000. Here's how the real world works for a lot of people, not everybody, but for a lot of people. 25. Most people 25 are not thinking about money. At 35 they're hearing about money. 45 There worry about money and it 55 there had prevented waiting, and when you look at these charts, you know why. Because too many people start to get serious about the personal finances down here, so the sooner you start, the better it could be. I wrote the lot a voucher completely intentionally to reach young people to reach the million strong of Generation Z and generation Y and the millennials. 77 million millennials bunch of you about to graduate, too. The lot factor is the ultimate graduation gift. Anybody who's watching this and you're 55 you've got kids. And you're like, Oh, just I had known this when I was young by this book, just to show them this chart by this course, just to show them this chart this chart of your teacher take this chart. And in any class, you could be an English teacher. A math teacher assigns teacher, take this chart and show this to 1/9 grade class or 10th grade class or in 11th grade class or 12th grade class. Because it's frickin black and white that the beauty of money is it doesn't know you. It doesn't know what sex you are. It doesn't know what color you are. It doesn't know who your mother Waas doesn't know who your father was. Doesn't know where you live money doesn't care. It's math. Money is math and the beauty of math to make you rich. It's basic Mac. If you can do basic math like what's 10% of a dollar? It's a dime. That kind of basic math. That's all you need to know. To be wealthy, I'm gonna explain, but compound interest is just basic math. This is another chart in the back of the book now the whole books story. But this chat This is a chart in the back of the book. I can just show a basic math. $5 a day, $10 a day, $20 day, $30 a day. I'm gonna teach you this thing called the 50 20 Formula 50 20 formulas for people want to retire early. You want to retire early in 20 years, $50 a day in 20 years at a 10% rate of return, which is what the stock market is average since 1926. So if you bought an index fund and left it alone and we get the same rate of return since $50 a day in 20 years is $1,139,000 $50 a day in years. His three million, 390,000 in 40 years. It's 9 million $486,000. You just pick your number and go through these charts. And later I'm gonna give you other rates of return because it doesn't have to. You don't have to have a 10% rate of return. You definitely have to save 10% savings. That rate that matters the most is your savings, right? How much money you're keeping?

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!