When David’s grandmother, Rose Bach, inspired him to make his first stock purchase at age 7 (it was in McDonald’s), one can’t help wondering if she had any inkling that her grandson would end up leading an international movement. Rose’s son Marty (David’s father) has been a financial advisor for 40 years; in fact, he built his business teaching investment classes. (Says David, “My dad was a star; he’d have 200 people to a class—people just loved him.”) One might say, David is simply continuing the family business.

And boy, has he ever. Known to millions of households in America as “that genial young feller on Oprah” with commonsense financial advice, David has taken the world of personal financial management by barnstorm, his books routinely becoming instant best-sellers in The New York Times, USA Today, Business Week, The Wall Street Journal, Amazon.com and BarnesandNoble.com. Starting with Smart Women Finish Rich (1999), then Smart Couples Finish Rich (2001) and The Automatic Millionaire (2004) and now Start Late Finish Rich (2005), David has transformed the home economic landscape of the nation, given new hope (and practical avenues for pursuing it) to millions, and found a way to help ordinary, everyday consumers do what no other teacher, personality or financial guru has succeeded in getting them to do (i.e., save for their future) by couching his approach in a handy three-word catch-phrase: “the Latte Factor®.”

It seemed inevitable that David’s path would lead him to the network marketing world. In fact, shortly after we decided to invite David to be our lead story for this issue, we learned that the Direct Selling Association (DSA) had invited him to be the keynote speaker at their fall 2004 convention—where he received a standing ovation from a tough audience of over 200 executives. Now you can read for yourself and see why.

Ladies and gentleman: David Bach. — JDM


When did you first find you had a flair for teaching financial management?

When I was nine, my mom told my dad she wanted one night a week off, so he dressed me up in a little suit and tie and dragged me to his investment classes. He said, “Here, you hand out the brochures, check people in and send them to the back of the room. Be a good kid, and after the class I’ll take you to Baskin Robbins.” It was my night out with Dad.

I was fascinated. I got to watch my dad being a great financial entertainer—and I got to see him change people’s lives. People would come up to me and say things like, “I’m a garbage man, and I’m a millionaire today because of your father.”


And that rubbed off on you?

When I was twelve, I was eating dinner with a friend of mine and his parents got into an argument. My friend’s father, a brain surgeon, had renewed his CD at the bank; his wife was grilling him about whether he’d shopped around for the best rate, and he was explaining why the rate he got was the best rate. Suddenly I spoke up.

I said, “Dr. Ross, frankly I don’t know why you would be buying a CD, everybody knows that stands for ‘Certificate of Depreciation.’ You should be looking at triple-A-rated municipal bonds. In your tax bracket, you would come out much further ahead.”

They just looked at me, like, Who is this kid?!


Chip off the old block!

The funny thing is, I always swore I would never become a financial advisor. I wanted to be an entrepreneur. When I got out of school I went into real estate, and I actually did make a lot of money pretty quickly in real estate, working as a commercial leasing agent on some very large deals. But pretty soon I found myself teaching everyone in my real estate company how to invest.

People would sit around my cubicle asking questions or come to me for financial advice. My father finally convinced me to get into business with him and from my very first day, I taught classes along with him. Within 30 days I was teaching my own seminars; within six months I was teaching a seminar for women, which led to Smart Women Finish Rich.

When I would teach, I observed that not everyone in the room had enough money to become a client. Realistically, probably no more than ten percent would become clients. So I developed a goal: I wanted to make sure that every one of those people left that room feeling more confident and better about their lives—and most important, that they took some action.

I told them: “I want you to have fun here today; I want you to leave feeling better than when you got here. But I don’t want to be a substitution for television. I want you to DO something that will change your life.”

That’s been my focus from the start: getting people to take action. All the books and financial education programs are very specific and action-oriented: “Go do this.”


And simple steps.

Very, very simple. If you don’t keep it simple, people won’t do it. The easiest decision in the world is to do nothing. Unfortunately, when you do nothing, that’s exactly what you get. If you want to give people something to do and have them actually do it, it’s got to be easy and simple.


When you spoke at the DSA convention last fall, was that your first connection with network marketers?

Actually, it was! I’d never spoken at a single direct selling or network marketing company event before.


What was it like for you?

I was very nervous just before I went on stage to speak. Everybody had been telling me, “This is a very skeptical audience, they’ve seen and heard everything, don’t be a rah-rah motivational guy…” I’m not a rah-rah guy or a motivational speaker. The truth is, I don’t even consider myself a speaker. I’m a guy with a mission: to educate one hundred million people to be free.


That’s quite a mission.

That’s our specific stated purpose at my company, Finish Rich Media: “We are building a company to help free 100 million people worldwide.” And the reason I have that goal is that when you free people financially, you free them to use their God-given talents.


So how’d you do?

Well, I got a standing ovation. I think they liked it.


How did you come to look at the world of network marketing?

It started with my work on this new book, Start Late Finish Rich. The idea for the book arose the same way all our books do: we saw a huge need. In talking with our readers, clients and audiences, we kept hearing the same refrain, “I love what you’re saying, it all makes sense…but it’s too late for me.”

No it’s not! It absolutely is not too late for you! And Start Late Finish Rich is our answer to that refrain.

When we went to actually write the book, we asked ourselves, “Okay, how do you start late? If you really are behind, what do you need to do to catch up?” Well, one thing you need is to earn more money. How do you earn more money if you’re a family, or a stay-at-home mother, or you’re over the age of 50? We researched this and came up with lots of answers—but the avenue that kept coming up was direct selling and network marketing. There was just no way of getting around it.


You started out as a skeptic?

The truth is, I went into this research with a “No way!” attitude. But the more I looked at it, the more it seemed like it really ought to work. I knew it didn’t necessarily work for everyone—but it sure seemed to be working for a lot of people.


Where did that initial skepticism come from?

Remember, I come from a Morgan Stanley background; I’m skeptical of everything! I’m the kind of guy who actually reads annual reports to see where the bullshit is. You can tell me, “It’s easy to get rich,” and I won’t believe a word you say.

I had disliked the direct selling model for 20 years. I got dragged to all those meetings when I was in college, like the meeting where they dropped the little dye into the water and everybody went Wow!, and the next thing you know everybody’s buying $4000 worth of water filters—and ever since, I’d avoided the direct selling profession like the plague.


And here you were now, researching it! What did your research tell you?

The number one complaint I’d heard about the business was, “Most people don’t make a lot of money.” I thought, “Okay…but do a lot of people make a little money?” Because if a lot of people can each make just a little extra each month, and you can teach them how to save that money instead of going out and spending it, then you’ve got a tool to help millions of people across the world to catch up.

So I researched it very, very carefully. The answer was, Yes: there was the distinct possibility for a lot of people to make a little bit of money. So I devoted an entire chapter in the new book to direct selling. I think it’s a vehicle for millions of people all over the world to make a little extra money—and use that little extra, along with our financial education, to buy their freedom.


That would seem to require a major shift in mindset, because network marketers have historically tended to spend what they earn.

That’s true. In the last few months I’ve been able to talk with some of the people who run these companies, and what I keep hearing is that the bulk of the people making money in this business aren’t saving any of it. In fact, I think the network marketing profession historically has tended to promote this idea: “You can have a nice car, a nice suit, new jewelry, maybe a big house, a great vacation…”—they’ve promoted the razzle-dazzle.

So yes, this is a new concept, and I think it’s going to change the profession.


How so?

I think it’s going to be the secret weapon that dramatically improves people’s retention rates.

Ten or 15 years ago, a lot of people joined direct selling for the social aspect of it. Of course that’s still true today, which is one reason the party plan business model is still so strong. But the large, well-run, successful companies, the ones doing $100 million or more in annual revenue, are starting to recognize a shift. The people who are joining their companies today want to actually see their lives change financially. Addressing that desire is going to be a critical factor in achieving better retention rates.


Which means we have to provide them the financial education.

Absolutely. You have to start teaching people, “Here, you can make $500 or $1000 a month extra income—and if you save it, here’s what that will look like in 15 to 20 years.” That’s what we need to do. We need to start really providing people a vehicle through which they can actually become financially free, and not just have more stuff. We need to start showing people that we have an actual road map for them to become financially free.


Network marketing has been very successful at showing people how to earn extra money, but managing that money intelligently so it buys our freedom, not just tomorrow but ten years from now, just hasn’t been a big part of our education.

In defense of network marketing, it hasn’t really been a part of anybody’s education. Corporate America has done a very poor job of educating employees to save money; that’s why Americans don’t save money. The average American this year will save less than three percent of her income this year.

Here’s what I would say to your readers: if you really want to make a lasting impact on the people you work with, then part of your job is to provide them the financial education that teaches them how to keep some of the money you’re helping them earn.


Interesting that you use the figure of $500; that’s a common benchmark in network marketing. We often say, people won’t quit once they’ve seen a check for $500. You’re saying that the actual financial value of that check, properly managed, can secure your financial freedom.

Ten dollars a day can change your life. I call this the Latte Factor®.

This is not an easy business; it takes work. You have to go to meetings, sell people on things, be involved and spend time. Nobody’s handing you checks; you have to go create your checks. If you do all this to create an extra ten dollars a day and then spend it all on lattes, was it worth the effort? No. But ten dollars a day—if you save it—can change your life.


Is there a reason your teaching has been so well received now, when people might not have been so receptive, say, ten years ago?

There is a massive tipping point happening right now, involving tens of millions of people across the US and across the border as well.

We just launched an initiative in Canada. The last few weeks I visited 12 cities and partnered with the second biggest bank in Canada; they’ve rebranded 1100 banks around my message. They’ve given out 100,000 books, they had 30,000 people come to my seminars, and we did 61 media interviews in 30 days. This initiative is being so well received that we think we’re going to visibly increase the savings rate across Canada in the next 36 months.



And bear in mind, I was unknown in Canada! And this kind of thing is happening in other countries, too; we’re in ten languages now.


So, why? Why now?

There are at least three reasons. Number one, the baby boomers are really getting worried. We’ve got 85 million people in North America in their fifties whose kids are grown and gone, the bulk of them have no savings, and they’re realizing, “Hey, I’ve got to catch up! How do I do it?”

Then you have the kids of the baby boomers—who grew up watching their parents not do it right. Ten years ago you’d never have gotten a teenager to come to an investment class. Now, a third of our audiences are under the age of 25.

The other day, we had a 15-year-old bring her 12-year-old brother to a seminar. Her mom saw me on Oprah and bought the book. But she didn’t read it—the 15-year-old daughter read it, went to the Internet, found out I was coming to town to speak, and got Mom to drop off her and her little brother so they could hear me speak! In April, we’re doing another show with Oprah on kids and money.

Finally, you have people in their sixties and seventies who want to make their money last. Three generations of people—young people, the baby boomers, and the older generation—and they all want this information.


David, you’ve been a committed skeptic of network marketing and seen your own view shift. Do you think there will be a substantial shift in the overall public perception of our profession?

To an extent, that shift has already taken place. We’re looking at a $100 billion-a-year worldwide industry, so I think it’s safe to say you’ve “arrived.”

Still, when I told people I was going to talk about direct selling in my next book, most said, “You’re going to talk about WHAT?! Are you crazy?!” So yes, there’s still a negative perception…but I think that’s already changing a great deal. The numbers don’t lie, and this is a big, big business.

It’s very difficult to reach people today. Between television, radio, banner ads on the Internet and all the other media, we’re bombarded, and we’re not listening. The best chance you have to reach me is if you’re my friend and you tell me you like something. I’m going to listen to my best friend tell me about a restaurant before I’ll listen to five reviews. And that, in essence, is network marketing.

The simplicity of network marketing is that you find something you deeply believe in, then use it yourself and tell other people about it.


Let’s say I’m a typical network marketer and all my life I’ve prospected people by saying, “Join me and you’ll get rich… Join me and you can work for yourself… Join me and you can quit your job.” What would you have me say?

“Join me and you can buy your financial freedom.”

Freedom is not a God-given gift; it’s something you buy. You can buy and own your life—or lease and loan your life. Most people are leasing and loaning their lives. My mission is to help people buy and own their lives.

I believe God put each one of us here to do something special. Most of us aren’t doing whatever it is we were put here to do, because we’re living paycheck to paycheck. My number one goal for my teaching is for people to make a shift so that when they earn something they automatically pay themselves first, paying into their long-term plan. Do that, and you’ll buy your freedom.

Direct selling, or network marketing, is a chance for you to make a little extra money, and with that, to buy your freedom. Do that, and you’ll spend the rest of your life doing what you were put here to do.