Book review: The Automatic Millionaire by David Bach

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My current trip to Japan/Singapore gave me a chance to read a book during the long flight. It is about ways to become rich (what other topic did you think the book would be since I write a personal finance blog?) so I figured I will share a book review with you.

The book is called The Automatic Millionaire by David Bach. The reason why I picked this book is because I was grabbed by the title ??utomatic Millionaire?? I figured that I spend so much time thinking about how to become rich, if there is a way to become rich automatically, I am all in! (Not to mention that this book is only $12.95 at the bookstore while others of similar length are more in the $15-$20 range).

This book is easy to summarize, because there is one solid point that it makes which is Pay yourself first. Most of you have probably heard of this term. For those that haven??, the term simply means to put money into your savings/IRAs before you get a chance to spend it, thus paying yourself first.

In the book, David suggests us to figure out our The Latte Factor, which are those unnecessary expenditures like a coffee or a pack of cigarettes we spend each day. He then illustrates that if you save the $5 on coffee each day and invest it, allowing it to compound at 10% could be worth $948,611 in 40 years!

The real life stories as well as the examples of how your money is convincing for most to start saving money. However, the simple idea of this book is its strength as well as its weakness. Because the idea is so simple, there was only material to write for half the book. The rest of the book was devoted into where to open and the different types of IRA, asset allocation, the importance of having an emergency fund, and buying a home. The latter half of the book (although some useful basic knowledge), had a tough time keeping the automatic theme of the book.

Who this book is for:

Those that are not convinced that they can save more money

Those that aren?? putting money into their savings first

Those that have never heard of the term pay yourself first

Someone looking for a refresher and also some ideas to build wealth

Who this book is not for:

People who are looking for a secret investment that will help them grow rich instantly

People that are already very rich

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3 Responses to “Book review: The Automatic Millionaire by David Bach”

limeade on April 27th, 2007 at 1:24 pm Says:

I’ve alro read this book. It has some good information, but it’s nothing all too new to someone who’s interested in personal finance.

I’m also not too fond of automatic withdrawls on my accounts. It’s a book worth reading though.

-limeade
Anonymous on April 27th, 2007 at 5:23 pm Says:

This book has great basic info! Well worth the read (it’s cheap too!)
theKimsta on May 25th, 2008 at 5:02 am Says:

Sounds like a good book to read. I am convinced that a disciplined and regular savings plan is a great way to become wealthy.

This is part of my plan to become a millionaire within 10 years. See my progress at: theKimsta

Cheers,
theKimsta