Better late than never

Better late than never

David Bach's investment manual motivates readers of all ages to secure their financial freedom through some easy-to-understand guidelines, says Sharadh Manian.

The art of coaching is more about the spirit than matter. Vince Lombardi, regarded as the greatest coach in sporting history, turned around Washington Redskins to win the American National Football League championship using services of long retired players. Closer home, we have seen how Dave Whatmore has inspired two minnows— Sri Lanka and recently Bangladesh, to perform beyond their potential in the 1996 and latest edition of the ICC World Cup.

David Bach’s bestseller, Start Late, Finish Rich, lives up to this reputation of a coaching manual enthused with plenty of spirit in its 300-plus pages to coach you toward financial freedom.

Start Late…is about taking control: of your finances, your income, but above all of your life. As the author mentions, “Money may not make you happy but lack of money can certainly make you miserable.”


Earning more won’t make you rich; spending less will. Ask yourself everytime — do I really need this purchase? 
Your real enemy isn’t the debt; it’s the interest. Avoid the minimum payment due route while using credit cards.
Split your savings equally into two. One to pay off debts, other to invest for your future. 
Your life should be interesting, your investments boring.Try the Perfect Pie (PP) approach.
Bach’s PP approach recommends dividing your investments equally in stocks, bonds and real estate.
Timing the market rarely works. If you are scared of investing in stocks use an index fund.

The catchy title may appeal to financially disturbed and depressed readers in their 40s and 50s, yet the book will serve well to anyone who wishes to achieve financial freedom, however difficult their present financial situation. Unlike bestsellers which promise the world but fail to deliver, Bach mentions beforehand: “Books don’t change people’s lives. People change their own lives.”

While I found the book refreshingly honest, it is primarily written for an American audience. The specific tips might sound irrelevant to our situations and culture. They may even put one off at first glance, yet there is enough wisdom present in the book to get even the most pessimistic started on the course to financial reconstruction.

This book is divided into five sections: financial planning, spending, saving, earning more and personal well being. While it covers personal finance, it is also a spiritual guide to rediscover oneself. The author discusses issues like better time management, alternative sources of income and community service to live a healthier and more peaceful life.

The style of writing is akin to a coach’s verbal assault: at times below the belt but one which encourages and makes one hungry to achieve financial goals. Bach does not mince words and talks tough on what it takes if one wants to succeed late.

Take for instance his advice on finding and eliminating your “double latte” factor. We all have enough latte factors in our lives to burn a hole in our pockets. According to Bach, these factors are the luxurious conveniences (such as buying bottled water instead of bringing from home) which you could do away with to earn precious dollars for your retirement.

However, if you have started late to invest smart, just taking care of your latte factors won’t do. You would have to sacrifice some basic amenities at times (termed the double latte factor) to achieve financial freedom. Picture this: You get up late or don’t find time to cook your lunch (or are plain lazy). You rush to catch a cab instead of taking the public transport and pay extra money—yet reach office late. You pay an extravagant sum of money to buy that lunch outside, which is neither healthy nor value for money.

If you could get up an hour early, and push yourself into making a snack for lunch and take the early local train, bus or probably pool with neighbours leaving early for offices nearby to your’s, you could save precious cash for your retirement.

These would cause small inconveniences but could easily be followed with marginal changes in one’s lifestyle. For women Bach recommends cutting on weekly trips to the beauty parlour! While these may sound alien and eccentric at times to Indian lifestyles, if you think hard finding your own latte factors is not difficult.

One scenario discussed is relevant to everyone. How not to fall into credit card trap by avoiding the minimum payment due route. In case you are drowned with credit card debt, use all your persuasive skills to make the card company give you an attractive deal to come out of it.

When you are confident enough to spend less and spend smart, you can learn to save more and earn more. Invest wisely; pay off debts like governments and corporates do, i.e. use a part of the income to finance the debt while the other half should be saved for the future. Pay yourself first before you pay the government. In an Indian context, this could mean for instance saving tax by investing more in provident fund. But more importantly spread your tax saving investments across the year rather than sacrificing the salary in the last three months of the financial year to save tax at the last minute.

Bach’s tips are not mere rhetoric, they are backed with statistical data and intelligent tables which reinforce the faith in what the power of compounding can do to your savings.

Another good method to set up saving targets is figuring out how to save 25% of your income. Think of it as working the first and last hour of your working day for your retirement. You always wanted to save money to buy a house. Bach suggests buying one instead of living in a rented accommodation. The money that you save in rent could have bought more than one house in your lifetime.

In the end Start Late, Finish Rich is about realising that it’s financially rewarding to begin from this moment than wasting another hour or so on what we have not been able to do in so many years. Get started, after all it’s better late than never.