The Automatic Millionaire: A Powerful One Step Plan To Live And Finish Rich

ISBN: 0767921313
ISBN 13: 9780767921312
By: David Bach

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Business Currently Reading Finance Financial Money Non Fiction Nonfiction Personal Finance Self Help To Read

Reader's Thoughts

Carrie Rose

This book is based on the solid and wise financial principles of saving money and compound interest. However, despite the excellent foundation of the book, David Bach manages to say some fairly dumb things.The chapter on homeownership is the most egregious example. This book was written during what we now know was a major housing bubble, and a few years after this book was published, home prices plummeted and foreclosures soared. But in his book, David Bach proposes that you CANNOT get rich as a renter and that you must buy a home using any means possible. He actually addresses the concern that real estate might be in a bubble - and he dismisses it as false! He suggests that people can afford to spend at least 29% of their gross income on house payments (I think 29% is wiser as an upper limit, not a lower limit) and that down payments aren't really necessary. He downplays the risk of foreclosure. Of course, a lot of people were misled during the housing boom, so out of curiosity, I checked out Bach's website to see if he acknowledged his mistake. From what I could see, it looks like he's still claiming that homeownership is a necessary part of becoming rich. I don't think he should tell everyone to rent, but he's far too extreme in his push for buying homes.Bach also made some claims that I disagreed with but weren't as dramatically dumb. For example, he discourages budgets because they're unpleasant. His alternative idea is that people should just decide how much to save and have it automatically put aside, then never touch it. He claims that after a few months, you won't even notice the drop in income from setting money aside. I think this technique will work for some people, particularly people who are saving only small amounts. But people who follow all his recommendations (retirement savings, an emergency fund, mortgage payments, and charitable contributions) in the amounts he recommends will be putting aside more than half their gross incomes! I'm pretty sure they'll notice the difference. In fact, after paying taxes, these people might be struggling just to buy food and put gas in their cars. But if you figure that realistically, nobody will follow all the advice in the book immediately, Bach's ideas could work well. And anyone who did manage to save as much as Bach recommends over a length of time certainly would become rich. I just don't buy the way Bach plays up the positives and downplays the negatives, and the way he insists that his ideas (like homeownership and no budget) are the ONLY way to go.In summary, the book is like a silly infomercial for a good product.

Peter

I would recommend this book to the complete novice, if you want to learn some very simple things that you can do to help you secure your retirement then read this book. If however, you want to really understanding investing, and finance this probably isn't the best book.The book has a few good tips that work for everyone:1: Pay yourself first (A common recommendation)2: Pay your mortgage bi-weekly (could reduce it by 5-10 years)3: Put away 10% of your money4: Tithe5: Always save some, even if you have debt, while debt reduction should be a priority, having a little cash will help to avoid future debt.The book also some tips that I don't agree with:1: Buy a home (This book was pre-bust) not all people benefit from home ownership and it's not something to be undertaken lightly. While there are *many* benefits, sometimes renting works for certain types of people and areas.2: Pay your credit cards with the lowest amount left first... While this is great psychologically, I would argue that you should probably pay the one's with the largest interest rate first. What if your lowest card has a 0% rate and the one with the highest balance has a 20% rate? You'd be much better off chipping away at that 20% card :)3: His assessments on when you will be a millionaire on $5 a day is based on 10% annual return, which by the way is better than the stock market (based on the S&p 500 avg for 50 years) long term average which happens to be arguably the best long term investment in terms of returns. How does he suggest you do this? Mutual funds... small problem being that somewhere in the 85%+ range of mutual funds _fail_ to even meet, much less beat the market. Even the ones that do often charge an annual fee as well as front/rear loads that can chip away at that rate. More importantly, just because the fund earns 10%, doesn't mean you will :) That's the money the fund earns *before* all of the costs. According to Warren Buffet, and Charlie Munger, and John Bogle (He's biased as he did create it...) the best investment for someone who doesn't want to learn, would be an S&p 500 index fund that simply tracks the market. These tend to have the lowest fees possible and essentially guarantee roughly the same rate of return that the overall market returns.In summary, this is a good book for someone who wants an easy way to guarantee some retirement and move in a more fiscally responsible direction. This is not, however, in my opinion the bible on this subject, nor is it the final word. While I do like his automatic payments structure, and do agree with that logic, I think the investment strategies need a little more depth and experience.

Erika B. (Snogging on Sunday Books)

I'll remember all your kindness when I become an automatic millionaire.

Mike

Basic information about money presented through some of the most contrived stories I've ever heard. I won't say that the information is wrong, but it isn't really groundbreaking either. The book might be aimed more at people who really are clueless about finances, because most of this is already in practice for me. Maybe I'm just ahead of the curve.

Mohammed Alsaleh

الكتاب بالجملة مفيد لعامة الناس .. كونها يحوي طريقة لتجميع مبلغ مالي جيد من خلال التوفير من الإيراد الشهري أو النصف شهري ..يحوي أفكار كثيرة رائعة .. لا يرقى لما طرحه كيوساكي في كتابه " الأب الغني والأب الفقير " لكنه في الجملة رائع ومفيدأكثر ما أعجبني فيه طريقة التسديد النصف شهري والذي يضيف نصف شهر في السنة ويسقط عليك نصف التكلفة بعد مرور عشرين سنة ..أنصح بقراءته

Maya

Unabashedly basic. You could easily learn this information from some good personal finance blogs. And the tone is overly condescending.

Sasha

This is a difficult book to rate. Informationally, it should get a 5. For ease of understanding, it should get a 5. But as a "good read," well, much of the first half read like an annoying infomercial and that really bugged. I also don't like phrases like "get rich."So, it's weird that I read this book. I did so at the suggestion of a friend, otherwise I never would have given it a thought. (Thank you, Katrina!) I began skeptically, but this ended up being the very book I needed to read, for me and for my marriage. Dear Phil has been patiently waiting 15-1/2 years for me to have any inkling about finances and planning. Nothing in this book was new to him, but it was a complete revelation to me. Knowing what I now know, I am amazed that Phil has stayed married to me this long!!!!! What a real man.This is going to be required high school reading for graduation from our homeschool. I truly wish I had understood all of this as a college student. Thankfully, Phil DID understand it as a college student and he's quietly tried to do what he could without me being "on board." Now life should get better for him.

Anthony Deluca

The Automatic MillionaireBy: David BachCopyright 2003Reviewed May 2008Listened to Unabridged AudiobookThe automatic millionaire is an excellent, practical book that will indeed instruct anyone how they can become a millionaire. In my subjective opinion, however, the younger one is, the easier it will be to make this work well. Also, some minimal level of income will help too. BUT, I recommend this book to EVERYONE who is not already independently wealthy.The book basically illustrates how one can mass a ton of savings in their lifetime and retire with plenty of money in the bank. This revolves around saving at least ten percent of your income… and not just manually putting it away each month, but automating the process of filling this repository of savings. A typical hard-working American couple in their early fifties is used as the example throughout this book.Techniques mentioned in the book include: The Latte Factor: Instead of spending just a few dollars each day on frivolous items, such as a $3.50 Latte, save that money. charts are given to show the mass amount of investment savings to which this can lead.; Pay yourself first: In other words make the redirection of money into your saving happen before any other redirection of funds, even taxes, occurs to your paycheck.; Make paying your self automatic: Don’t count on yourself to manually make a transfer, instead having this money redirection be automatic so you never have to think about it.; Don’t buy anything with credit other than a house: You cannot invest and save well if you are paying interest charges on non-investment items.The only thing I did not like about this book was the drawn out introduction where Bach kept saying over and over again how his plan is practical and works, but without starting to explain his plan. In conclusion, however, even with the few negatives I mentioned this is an excellent, insightful, inspiring publication that would be useful to all.

Mark

A very easy quick read with large type. The few ideas in it are very good, pay yourself first, eliminate debt, buy a house, automate everything, the Latte Factor to help people budget, setting up an emergency, and giving charity. There is also a fair amount of information on how to get started in these ideas, but overall this book could have been condensed considerably. I think I would like to automate more than I currently do, and it has inspired me to track my spending to see where I could save more, if I’m spending too much on certain things I don’t really need. The house chapter is very worthwhile, but doesn’t apply to me now, and for now I consider my parents to be my emergency fund. I do like the chapter encouraging charity which I would like to further do. I don’t think there is enough solid information about how to allocate your assets, but this is more of a starter book to get you headed in the right way rather than a finance book.

Catherine

The Automatic Millionaire by David Bach is another book recommended by the financial planner Husband and I want to go see. It was an easy read and the principles he sets forth are so simple to to and keep doing. The trick is to make everything AUTOMATIC.Pay your bills automatically using a bill pay service. Pay yourself through payroll deduction so that you never see it. What you see you don't miss. How to pay your mortgage off quick and easy. How to get out of credit card debt quick and easy and still save money. He shows how investing early pays of big in the long run, bigger than if you start late and invest continuously. I wish I had read this book when I was still a teenager. Some of the things Husband and I hadn't done yet, and we have already corrected that. Some things we didn't have to worry about b/c we have no credit card debt. We do have a car loan and a lease payment, but we have a plan to get that taken care of fast. (Anybody want to buy our 69 GTO? She's a beauty!) We've decided that any future car purchases are going to be cash and only cash or otherwise it is a no go. We already have a plan in effect for paying our mortgage off early, but it reinforced to me that I was doing something right. I would recommend anybody, regardless of age and income status to read this book, it will change your life.

Molly Murphy

Put financial savings as a priority. This book was a great motivator and teaches you strategies to find money to save and how to put it on autopilot.

Migelle Dominic

I chose the guidebook, "The Automatic Millionaire: A Pwerful One-Step to Live and Finish Rich" by David Bach, because I'm the type of person that plans ahead for the future. To be able to predict what'll happen and to be independent, supporting myself such as being financially stable. The story includes the Mcintyres, an ordinary looking family that were actually well off into their retirement for a permanent vacation. They benefited from David's lessons to become an automatic millionaire and they are set for life while they are still in their 50's. They are only one of many, and it's many more that were impacted by David Bach to be financial wise, be richer and enjoy life worry-free. "The idea was identical. If we saved a few dollars a day, we could eventually buy our own home." It seems simple enough, but the power to be dedicated and have enough sheer will power to do so challenged me to try it and I'll be looking forward to how much I invested. It's the idea that money we spend on little things like coffee and cigarettes shouldn't be wasted and should rather be saved for a better benefit than taking in dose of essentials every now and then. The words the author used were very demanding, but also encouraging,it wasn't all too confusing and was very straight forward. The words used was leveled for young-adult readers. I would recommend this book to anyone in general, it wouldn't hurt anyone to gain money, depending how much. The point is, with the lessons learned from this book, anyone can become an automatic millionaire.

Dora McFadden

This was a good book but honestly its a lot of common sense. The reality to being a good saver is to use good judgement. But the author does make some good points about how in the long run when you buy your daily cup of coffee from any place $2 a day over decades adds up fast and you could have saved yourself a couple hundred grand. When you think of the little things at that perspective you think twice about "the latte factor". He has good points on investing in your 401K and IRAs. Plus the concept of paying yourself first. Its something that after the first read I think you can skim over every three to five years to "refresh" your goals and get yourself back on tract.

Tim

A very simple and short read, with one basic premise: start saving money, today, by setting up an automatic 401(k) (or similar) pre-tax contribution. There's a bit more information in there about what to do if you have personal debt, how to invest in your own home, etc., but it's basically about ending up with a bunch of money by simply contributing to your 401(k).I already do contribute to my 401(k) at work, but reading this was a good reminder of why I should continue to do so, and how much to contribute. I also learned a bit about the best ways to pay down a mortgage (the twice-a-month payment plan is interesting).

Leah Nadeau

Best way to not have to be disciplined and budgeted is to make everything automatic. If it's automatic you don't have to think about it and it's just running in the background. Even saving 5% of your pay will make a huge difference in the end.

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