David Bach

You will notice it for one or two paychecks.

And by the third or fourth paycheck, you won't notice it.

And you will adjust your lifestyle to the income that's coming in.

Only now you'll start to build wealth.

100%.

And let me ask you a question, because you just were so gracious to share your situation.

You had set aside money in an emergency account, and then you needed to use that money.

I would imagine, were you happy that you had put aside money in an emergency account so that you had it when the emergency came?

I mean, because my grandmother used to say to me, you know, David, rainy days come and you need to have an umbrella or a raincoat when they come.

And what she would say to me is, that's called your rainy day money account.

You need to put money away for a rainy day because they come.

and if you don't have money set aside for rainy day that the emergency account when that emergency comes you will really be in trouble i've had people come up to me and give me hugs and and cry in front of me saying that david i heard what you were saying and i focused on building an emergency account and then when covid came and i couldn't work and my business was wiped out i didn't lose my house and i had money to eat

okay so the first thing i would say is if you have a job an employer with a 401k plan please use it that would be the first thing so i would go make sure you're signed up for the 401k plan and that you're not putting away the minimum so today most 401k plans are now automatically

enrolling you this is new this is a result of the new secure 2.0 act so when you get a job if the company has a 401k plan today they will automatically enroll you but they will only pull three percent out of your paycheck so what i would tell you is go find out does your employer have a 401k plan

Are you using it?

And how much are you putting away into the 401k plan?

And then the most important decision you will make is at a minimum, I would tell you right now that you should put at least 10% of your income in that 401k plan.

Ideally, I would tell you to put 14%.

And on top of that, your employer will match additional dollars if they have a matching program.

If you do this, we know that on average, over 27 years, that's what it takes for the average American to become a millionaire using a 401 plan if they save 14% of their income.