The Automatic Millionaire Book Review

by Scott Sery on August 28, 2012

Most people do not like to pick up personal finance books.  Let’s face it, generally speaking they can be quite dry, packed full of statistics and numbers, and after just a few pages you are left with a sour taste in your mouth.  It is no wonder that most people have never read a single book on finance in their life.  If you are to read one book, that will give you more knowledge than many of your peers, you should read The Automatic Millionaire by David Bach.

The title of the book really explains the ultimate goal: automatic wealth accumulation.  Throughout the pages you will read stories about students David has taught that employed his practices and saved enough to retire early.  These people were not lawyers or doctors; they made modest incomes and had the same opportunities as most people out there.  What set them apart was they took their finances seriously, and instead of frivolously wasting money on stuff they do not need, they set it aside to live a rich life later.

If you have read anything about personal finance, you will most likely have heard of the Latte Factor.  It is the simple idea that small purchases do not seem like much at the moment, but they add up quickly.  By being conscious of your spending, David shows how these purchases can be skipped in order to have a fully funded retirement.  Instead of buying expensive flavored coffee, David points out that you can be paying yourself in order to break away from the 9-5 as soon as possible, and then do what you really love.

Through the first half of the book David gives so much great information you tend to get overwhelmed.  Since it is so easy to read, you may be tempted to just breeze through and not pay much attention.  This does nobody any good.  Instead, he puts some workbook style pages in there.  Nothing too long, but little fill in the blank type spots where you can sit down and figure out how it applies to you.  As the book progresses, he gives many great resources that can be looked up and used to get started on your way to living and retiring rich.

The book was written in 2005.  As we know, the financial world has changed a lot since then.  While some of the numbers David uses in his examples still apply, many now seem to be off.  For instance, he talks quite a bit about earning an average of 10% in the stock market.  Over the long run you could probably get close, but you may want to substitute some smaller numbers to make your retirement estimates a little more conservative.  Overall, the concepts are simple, the ideas are nothing extraordinary, and putting them into practice really only takes a few minutes.  The bottom line comes down to making it all automatic; don’t rely on your dedication and discipline when these systems and processes are ready to do it for you.

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Scott Sery

Scott Sery is a native to Billings, Montana. Within an hour in nearly any direction he can be found fishing, hunting, backpacking, caving, and rock or ice climbing. With an extensive knowledge of the finance and insurance world, Scott loves to write personal finance articles. When not talking money, he enjoys passing on his knowledge of the back country, or how to live sustainably. You can learn more about Scott on his website ScottSery.com

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  • http://twitter.com/TacklingOurDebt TacklingOurDebt

    I have a book by this same author that I picked up a few
    years ago. It is titled Smart Couples Finish Rich.

    I’ve read a few
    chapters and he does explain things in simple terms. He begins the book by
    talking about when he and his wife got married and how they didn’t see eye to
    eye on how to handle their personal finances.Something that I would have thought that he would have discussed prior to getting married.

  • Jason @ WorkSaveLive

    I’ve heard a lot about this book but haven’t picked it up yet. I have too many other books that I’m hoping to get to and my list has grown quite long. Automated savings is a great thing as most people simply don’t have the discipline to invest/save on their own. Making contributions to your employer’s retirement plan is a great way to never touch the money and automate that savings!

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