Summary of The Automatic Millionaire
Copyright © 2003 by David Bach
Published by arrangement with The Doubleday Broadway Publishing Group, a division of Random House, Inc.
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Did you know that you don’t need a big salary to become a millionaire, and that a carefully organized budget and intense willpower aren’t even necessary? All it takes, says David Bach, is a simple one-step plan. Follow it to become an “automatic millionaire.” Bach’s save-your-pennies book is straightforward and sensible – though it predates the recent economic downturn. It comes complete with helpful tables and charts. He details how someone with an average income can eventually amass wealth through automatic savings. getAbstract finds it hard to argue with his basic, common-sense principles: Save steadily, avoid credit card debt, and so on. But Bach gives little weight to various real-life scenarios that can throw a money wrench into the most sensible savings plans. For example, what happens if you lose your job, get seriously ill or find that your home is depreciating? (In fact, he says U.S. houses double in value over five years. Alas, that’s not the case in many places at the moment.) What about folks with erratic incomes who can’t make automatic savings payments – the locus classicus of Bach’s plan? What if 15% of your paycheck just doesn’t add up to enough accrual? That’s not to mention that Bach’s instruction to invest at a 10% return, which is not an easy score to achieve these days. Do your own math. Despite his occasionally utopian tone, Bach does provide solid information on how to build wealth. You can only benefit from his concrete, logical suggestions on how to get rich, slowly.
In this summary, you will learn
- Why you must pay yourself first;
- What the “Latte Factor” is;
- Why homeownership is the way to build wealth;
- How to trim your mortgage payments;
- Why you should avoid credit card debt; and
- How to become an “automatic millionaire.”
About the Author
David Bach is the author of Smart Women Finish Rich, Smart Couples Finish Rich and The Finish Rich Workbook. Bach hosts a radio show that is syndicated throughout the U.S. He regularly conducts financial seminars across North America.