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David Bach
David Bach is the author of the Finish Rich series of books offering financial advice with the persona of 'motivational speaker'. Not a bad thing, most people need as much motivation as they need hard advice.

I appreciate his coining of the phrase Latte Factor® regarding his observation that the seeming small call of a premium coffee, $5, when added up over a year, can instead be invested and turn into nearly a million dollars over a period of 40 years. No arguement with this, I reference this approach in the first installment of my "Getting Started" series.

To be clear, I think David has a good message and provides valuable information. There is one point where I disagree with him, and that is regarding bi-weekly mortgages*. David suggests that this is worth doing even at the expense of paying the lender $200-$400 to set this up as well as up to a $6.95 monthly fee. Sorry, this doesn't pass my common sense test. To be fair to David, he justifies his position (against the claim that one can manage these payments on their own), “It’s just nonsense because people don’t do it on their own. I talk about how to do it on your own in my book. I say, ‘Make an extra payment a year.’ Nobody does. Add extra to your mortgage. Nobody does.”

A future article on bi-weekly mortgages will discuss why I'd avoid them altogether. Other than this one point of disagreement I find his advice to be petty sound, in general.


*A bi-weekly mortgage is one where the homeowner starts with a 30 year fixed mortgage. The monthly payment is divided in half and this payment is then made every two weeks. Got that? Since there are 52 weeks in a year, this method creates a thirteenth payment each year, and reduces the mortgage term down to about 24 years from 30.
JOE