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* I will be giving away 4 copies of this book to my email subscribers this Saturday (10/6/2007). If you still haven’t subscribed yet, do so here.
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The Quiet Millionaire is a book that contains a wealth of information on personal finance topics. With forty plus years of professional experience as a personal and business financial advisor, Brett Wilder shares with us his expertise on how to accumulate and keep our wealth.

This book’s theme is tied very closely to the title of the book – the quiet millionaire. Instead of writing about how to be frugal or the secret to picking the right stock at the right time, this book focuses on how the average population can carefully plan and be a millionaire with time, patience and good probability.

One of the first Brett advices is to discover who the real you is and what you really want out of life, while making sure we plan for money to be our servant instead of being our master.

Next, he explains to us the seven major obstacles to Financial Success:
1. Undisciplined Spending
2. Materialistic Thinking
3. Burdensome Costly Debt
4. Taxes
5. Inflation
6. Poorly Structured Investment Portfolios
7. Unforeseen Life-Changing, Financially Devastating Events
This sets up the rest of the book where he tackles all sorts of topics such as cash flow, investing, taxes, and retirement.

Cash Flow
The key to having a positive cash flow involves knowing where our money is going. This includes creating a budget, in which personal finance software such as Quicken or Microsoft Money can help. Other tips include having a plan to determine cash flow requirements to fund future goals and objectives and paying ourselves first with automatic savings deductions.

Investing
Brett is a big advocate of low cost index funds. He believes in the long run, most people will end up leaving money on the table by trading individual stocks because many of us let our emotions get in the way. This is great advice for so many people because this totally takes the maintenance work required for stock picking out of the equation and just let the money work for us.

Taxes
In order to minimize taxes paid, we should actively plan for tax reductions. This means proactively perform intelligent tax reduction to maximize our after-tax dollars throughout the entire year.

Retirement
Once we retire, the primary focus should be to protect and preserve our wealth instead of trying to accumulate and grow it. One of the advices given is to establish a lifetime gift-giving program to reduce the value of his/her estate and transfer it to someone else over time without incurring taxes.

Target Audience
The book is for people who have a good income stream and would like the extra help to accumulate and keep their wealth through time. People looking for the secret to getting rich quickly are not going to find what they are looking for in this book.

Last Words
From the cover and title to the content, this book is about substance. There is nothing fancy in this book, just straight forward personal finance information that we can all benefit.

* As mentioned at the top, don’t miss your chance to receive a free copy of this book. All you need to do is be an email subscriber by clicking here.

Continuing our series of chapter by chapter review of the Automatic Millionaire by David Bach (Click here for the introduction and links to the other chapter reviews.), This chapter is about the importance of emergency funds and how you should have it earn some interest without too much risk.

This may sound like common sense to you, but David highlighted an example that one of his clients actually hid the emergency funds in his backyard! Just remember that your emergency cash should:

1. Allowed to earn interest
2. Almost no risk of capital depreciation at any given time
3. Very liquid

Here are the action steps:

• Commit to building an emergency fund: The suggestion was for 3 months??worth of expenses. Individual situations may vary, but 3 months should be a good starting point
• Decide to earn interest on your emergency fund: Enough said??/li>
• Open a rainy day money market account or a US savings bonds rainy day account: These are all good suggestions, and the online savings account are pretty good choices too. For those that follow this blog, you know I use Etrade Online Savings account
• Your rainy day account should be funded AUTOMATIC in a set schedule until it is big enough for you to feel secure: Without it being automatic, it is very hard to keep up.

The next chapter is titled: Automatic Debt-Free Homeownership which includes perhaps one of the most concrete money saving tip in this book. The tip can potentially save you tens of thousands of dollars! Come back regularly to check to see when the article will come out!

Disclaimer: This is an ongoing series of the book review of the Automatic Millionaire by David Bach. Click here for the introduction and links to the other chapter reviews.

This chapter is really about ways to make your deposits automatic, and many reasons why your retirement accounts fit the automatic theme. Without delay, here are the action steps:

• Make doubly sure that you are signed up for your 401k plan at work: This hopefully is a no-brainer for us. The benefits like deferred savings, employee match should be enough reasons to get us to join the retirement plans offered by our employer. For the few of us who are lazy to join, please do not delay since you are essentially giving money away.
• Open a IRA if you do not have a retirement plan at work: I say open a IRA even if your employer has a 401k plan. Most of us can contribute in both.
• Open a SEP IRA or a One-Person 401k/Profit Sharing Plan if you are self-employed: I never knew that for someone who qualifies for a SEP IRA, he/she can contribute 25% of their gross income of up to $42,000 a year; while the profit sharing plans allow a mix of contribution percentages of also $42,000. I am going to research on these two types of retirement plans and report back, so stay tuned.
• Decide ahead of time how much you want to contribute each month and how you want to invest your retirement contribution: Make sure you have a plan ahead of time, which is the first step to making it automatic.
• Remember to make it automatic! Either have your employer deduct it through your payroll or use the bank and brokerages automatic investment plans: Automatic, automatic, automatic. Just remember that this is the key!

Next chapter is about automatically saving for a rainy day. Stay tuned.

Picking up where we left off, this is a discussion of the Automatic Millionaire Chapter by Chapter Summary series. The book review can be accessed here and the chapter action step review’s links will be added to the book review as they become available.

This chapter illustrates the fundamental point of the whole book: Decide to Pay Yourself First and Make it Automatic.

The action steps are:

• Forget about budgeting. The book talks about budgeting as something that is too cumbersome and something that not everyone can benefit. David Bach also argues that his method does not really require budgeting because if you pay yourself first, you are free to use the rest of your income as you wish. Hence, no need for a budget. I personally is a numbers person, and I will always keep a budget just so I can see which categories I spend money in so I can adjust accordingly which in my opinion enhances his method of automation
• Forget the get rich quick schemes: Don?? be tempted with these types of schemes since most of these are lies! Just remember that if you save a small amount a month, the money adds up, and through time, you will accumulate much wealth!
• Commit to paying yourself first: paying yourself first refers to putting the money into savings/retirement accounts first before you get a chance to pay your bills (paying someone else). This is very important. If you can put the money into your savings first, then you won?? have a chance to spend it
• Decide whether you want to be poor, middle class, or rich, and choose the right percentage to pay yourself first: Obviously, the more percentage of your income you save, the richer you will be down the road. The idea is to decide ahead of time a fix percentage, and then have the money transferred to your savings before it even goes to your checking account.

Interesting points? Stay tuned for the next chapter titled Now Make it Automatic!

There are many helpful action steps at the end of each chapter of the Automatic Millionaire (for more background info about this book, click here). Therefore, I plan to list them out here chapter by chapter in the coming days and discuss with you each step in more details in hopes that we can all get rich by following his advice. In the end, don?? you want to become an Automatic Millionaire too?

• Recognize that what matters is how much you spend and not how much you earn: This is such common sense. However, many people fail to realize this because as their income grows, their spending also grows. There are countless people that can actually save much money if they tone down their spending just by a little bit.
• For just one day, track all your spending to the cent: This is the first step to realize how much you are spending on day-to-day items, so you can prepare yourself to see where you can spend less.
• Decide this moment that you can live on a little less so you can start saving today: Saving takes will power at times, but do not worry because it can be done and you will thank every financial blog writer/book author when you are older in life if you practice this.
• A few dollars a day can really add up. There is an online calculator from the author’s website (http://www.finishrich.com) for you to try out so you can understand the Latte Factor more clearly

Stay tuned for the next chapter summary titled Learn to Pay Yourself First!

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:

Who this book is not for:

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