Money is Your Friend - Phil Laut�s Seven Types of Savings Accounts

Rated:

, 0 Comments

Total visits: 150

Posted on: 19th Jun 2014

Phil Laut was a prominent money consultant who is best known for his bestselling book entitled Money Is My Friend. Although it was published back in 1978, Laut�s bestseller remains one of the most talked about personal money guides of this century. Money Is My Friend is a contemplative study into the mental and behavioral characteristics of Poverty and Prosperity Consciousness. Laut believed that one�s earnings status is directly proportional to his state of mind as it relates to poverty and wealth. In other words, being poor or wealthy is a result of our self-worth, personal beliefs about money, and earnings power. In Money Is My Friend Laut devoted a chapter to seven types of savings accounts for creating wealth. This post will examine each of these savings accounts. Laut passed away in March 2010.

Cash Flow Savings Account
This cash flow savings account is a basic savings structure. With this account you simply deposit all of your income into it as soon as you receive it, and withdraw it to pay your bills or fund your checking (or other savings accounts). The cash flow savings account works best when the withdrawals made from the account are smaller than the deposits. According to Laut, following this practice will cause the balance in this account to increase. Overtime, the increasing balance in your cash flow savings account will equal your month�s income.

Large Purchases Savings Account
The purpose of the large purchases savings account is to keep it empty. The key to this type of savings account is to deposit money into it regularly, and withdraw the money to make large purchases for such items as appliances and household luxuries. Laut, stated that most people, with limited financial education, possess a large purchases savings account as their sole account. They withdraw large amounts of money from it on a regular basis, which often results in future money struggles and feelings of guilt.

Financial Independence Savings Account
The financial independence savings account is for creating wealth and financial independence. With financial independence, you are free to work, and take time off whenever you wish without the concern of employers; payroll schedules; and workplace bureaucracy. Another advantage is that you have a residual cash surplus going to your bank account each month whether you are working or not. To use the financial independence savings account, Laut believed that the two rules you should follow is to spend the interest regularly, and avoid spending the principle entirely.

Millionaire�s Savings Account
The millionaire�s savings account, as the name suggests, is created to aid you in saving enough money to become a millionaire. According to Laut, the quickest way to become a millionaire is to master the Four Laws of Wealth in Money is My Friend. The idea is to deposit large amounts of money into this savings account, and to only withdraw it to make sound financial investments.

Annual Income Savings Account
The annual income savings is formed to allow to you save and accumulate enough money so that it matches your annual income. This account is designed to permit you to take a year off, and have the cash reserve available in the account to replace your income for that year. Laut provided details about how to save a years� salary. He suggested saving two days� worth of income in it, and then taking a paid vacation day, leaving one day�s income in your account. Then, you would save four days� income, and take two paid vacation days. You would increase the savings amounts until you have finally saved a years� worth of your income.

Taxes Savings Account
The taxes savings account is used to save enough cash to pay your taxes by April 15. You would simply determine your tax bracket, and then deduct this from your earnings. This is especially important if you�re self-employed. The most effective method is to deduct estimated taxes from your income every quarter, and then deposit it into your taxes savings account. If you use an accountant to prepare your taxes, it�s usually best to transfer the money from the amount into your accountant�s federally-secured escrow savings account. He would then pay the taxes on your behalf from his escrow account when the taxes are due.

Generosity Savings Account
The purpose of the generosity savings account is to accumulate cash to voluntarily give it away to others. You are free to bestow the money in the form of a cash donation, grant, or gift for any worthwhile purpose that you wish. The idea is to give to a cause that exists to improve the human condition. Giving not only serves to help others, but also allows you to bless others with your will and ability to enhance the quality of life.

Conclusion
These are Phil Laut�s seven types of savings accounts for creating wealth. Want to learn more? Invest in a copy of Money Is My Friend. If you�ve already read the book, why not share your thoughts about it here?

Comments

There are still no comments posted ...

Rate and post your comment

Username:
Password:
Forgotten password?

Most Popular

Money is Your Friend - Phil Laut�s Seven Types of Savings Accounts

Login