What she told him was that “There are three types of people in the world: Those who come to McDonald’s and eat here, as you are now, and spend money; those who work here for minimum wage; and those who invest in the company. The investors get rich.”
“The experience of thinking like an investor at the age of seven changed my whole life,” says Bach, who co-founded AE Wealth Management. Consistently investing a portion of one’s income, a strategy he calls “paying yourself first,” is the key to building wealth.
In his New York Times best-selling book “The Automatic Millionaire, “ Bach shares the secret: “Becoming rich requires nothing more than committing to and sticking with a systematic savings and investment plan. Compound interest should lure would-be investors if nothing else does, he points out. “The sooner you put your money to work, the better.”
He and other experts advise that, rather than trying to pick stocks, you begin with investing in a tax-advantaged retirement account such as a 401(k) or an IRA or Roth IRA. A second step could be looking into index funds, which offer diversity at a low cost and pretty consistently deliver good long-term results.
He advises that if you are hoping to get your kids off on a good path financially, you follow Grandma Rose’s approach. Help them buy a share of stock in a company they know and then continue to encourage them to build on that small beginning. “It will change their outlook on everything” for a lifetime.