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

Chris

This is the most helpful financial book I have ever read. It is easy to understand and fun to read. I am already excited to start building my wealth.

Cortney

I'm a bit of a personal finance nerd, and I love budgeting, being frugal, and paying off debt. I tackled my consumer debt after returning home from a teaching job in Japan, and in about 2 1/2 years paid off about $20K thanks to Dave Ramsey's "Total Money Makeover" and "Your Money or Your Life" by Joe Dominguez and Vicki Robin. Between those two, I had all the motivation/information I needed and diligently dug myself out of my B.S. money ways while working full time and going to grad school full time (for free, thanks to my employer- hence the full time work thing).This long winded introduction had a point... oh, yes. So I saw this book on my mentor teacher's shelves, and my other mentor teacher uses it for her LA IV class, and I decided to check it out to compare to other finance books I had read. All in all, I think it's a solid book. The "automatic" in the title doesn't refer to the timeline of achieving millionaire status, but rather the method of becoming a millionaire by automating all of one's bills so that one doesn't miss the money being diverted into retirement accounts and savings funds and debt payoff. I fully agree with this principle, because humans are in general terrible at wishy washy things like "Motivation" and "Willpower". I believe these are myths. Accept that you don't have the wherewithal to diligently get money and give away 1/3 of it every month to boring adult things like 401K's and credit card payoffs, and just make it automatic so you never see it/never miss it. If people only followed this one bit of advice and were complete nincompoops with investing I think it would serve them well.Did I learn anything new? No, but nothing in personal finance is truly new and groundbreaking- we all know we should avoid debt, save for retirement, and not fritter away our money on credit card fees and interest, but most people still do it. So there needs to be 31 flavors of personal finance information out there so that people can find what makes them sit up and finally pay attention to basic adult skills of financial responsibility. I think this book would be a great starting point that is more nuanced than Ramsey's "Total Money Makeover" and less New Age-y than "Your Money or Your Life". It's straightforward, easy to read, detailed without getting dense, and makes something very overwhelming seem manageable.

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.

Deena

This book made me rethink all my views on money. It was also the impetus to get me focused financially.

C.J. Graves

I'd read many other personal finance books before this one. Something you learn after a while is--they all have the same basic information in them.Pay yourself firstLive below your meansSavePut your money in the right investments for your situationyadayadayadaWhat made this book different was the "automatic" concept. Not that other books don't tell you to set up automatic payments as well, it's just not the central concept, and I believe it's a crucial component for people to understand if they want to get ahead without sabatoging themselves. Once you set up an automatic withdrawl from a bank account to be deposited automatically into an investment, well, it's hard to change that. This is a good book for those wanting to learn some simple strategies to guard against the old "money burns a whole in my pocket" excuse. I've given this book as a gift and would recommend it to my friends.

Erika B. (Snogging on Sunday Books)

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

Andy Valen

It couldn't be any easier to save for retirement, or save in general. This truly is a one step plan...so why is the book 200 pages? Because one page books don't sell. Read this as your only David Bach book, because his other ones are just rehashing the same thing without the automatic part. The Latte Factor is interesting...if you buy a Latte from starbucks every work day for a year, you should stop. You should invest that money in an account and yield 10% interest on it annually. If you are in your 20's then this should add over a half million to your retirement (if you ignore taxes). But his point was more along the lines of, look - you spend so much moneyon crap you don't need to be spending it on...stop wasting it and start investing it.

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).

Shan

The Automatic Millionaire is a popular personal finance guide geared toward beginners that, despite having some good advice, fails to be a solid finance book due to two major issues.First, the first impression one gets is that this book reads like a late night infomercial. Had I picked this book up at a bookstore I would've put it down after reading the first few pages. I was able to make it through the book by ignoring the snazzy marketing-speak; and that's no small feat. I felt like the whole time I was being sold some sort of Ronco product, and that made me feel dirty and dishonest on Bach's behalf. That style of writing only succeeds in turning off your readers.Second, Bach misleads his readers by suggesting they forgo a planed budget. His point is that if you do a written budget you'll fail to pay yourself first. For beginning personal financiers, that is a risk of budgeting your paycheck, but there is a way around it . Bach should suggest people pay themselves first, then budget with what's left. This approach is not only more holistic, but it also teaches first-timers the importance of actually knowing where money is coming from and where it ends up.

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.

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.

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.

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.

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.

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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