Book Review - The Automatic Millionaire
By Mike Hillyer | Related entries in Credit Cards, Debt Management, Financial Management, Financial Planning, Home Finance, UncategorizedLast weekend I found myself in an airport shop in Salt Lake City, halfway home from San Jose with a 2 hour flight ahead of me. I had learned from the previous leg of the trip that the plane I would be flying on featured so little room that using my laptop was out of the question, so I thought I would find myself a cheap book. I wanted something fairly cheap, fairly thin, and related to personal finance.
What I found has to be one of the simplest and best personal finance books I have read in a long time. The Automatic Millionaire by David Bach is not great because of any new of innovative methods for getting rich, but because it takes common sense advice that many of us have heard and presents it in an easy to read and apply format.
The advice is pretty simple and I am sure you have heard it before:
1) Pay Yourself First
2) Have an Emergency Fund
3) Pay your mortgage bi-weekly to pay it off faster
4) Pay off your credit cards quickly
5) Give back to the community
There is nothing earth-shaking there, in fact the only real twist that David Bach adds to this advice is to automate every point above by using payroll deductions and automatic withdrawals. There are no secret formulas, no get rich quick advice, no keys to buying homes with no money down. This book is full of stuff that you may have heard from your grandparents, but David Bach presents it simply, convincingly, and effectively.
The book is a nice short read at ~200 pages, and it is a quick read (if I had picked it up in San Jose at the start of my flight I would certainly have finished it in the 4 hours combined flight time). It was good to see that I knew and was applying most of what it contained to some degree, and I learned a couple of things along the way. This is a book I can certainly recommend, and one that should be required reading at the end of high school. Pick it up, you won’t regret it.
Update: It looks like Sean at Irregular Payments beat be to the punch on posting a review. See http://irregularpayments.com/2005/04/25/brief-review-the-automatic-millionaire/
This entry was posted on Tuesday, April 26th, 2005 and is filed under Credit Cards, Debt Management, Financial Management, Financial Planning, Home Finance, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
April 26th, 2005 at 8:01 am
I think it’d be a great “textbook” for a real home economics class in high school, wouldn’t you agree?
April 26th, 2005 at 8:23 am
Certainly. I wish at 15 somebody told me that if I put away 3000 a year till I was 19 I would retire on 2 million dollars.
April 26th, 2005 at 9:02 am
What do you know, great minds
thinkread alike…April 26th, 2005 at 9:12 am
Indeed… the home ec class I took in high school - believe it was called ‘Bachelor Survival’ or something equally ridiculous - taught me, oh, lets see, how to make a good Chicken Kiev (seriously) and maybe how to balance a checkbook (and of that I’m not even sure).
Certainly no mention of saving for retirement. Or the pitfalls of credit cards. Or, hell, the greatness that is compounding interest. That kind of info would have actually been useful, and would have given us a much better foundation to go forward than how to make a butter drenched chicken dish!
April 26th, 2005 at 9:24 am
Oh I don’t know, it’s mighty hard to beat a good butter drenched chicken dish…
April 26th, 2005 at 9:37 am
While I haven’t read the Automatic Millionaire yet, I swear by Bach’s “Smart Women Finish Rich.” It expands on all of these principles and gives a great introduction to all things that fall into the realm of financial planning. “Smart Couples Finish Rich” is nearly the same book, written for a different auduience. But no matter what your marital status or sex, I must say that they’re the best books out there for someone who has no idea where to start.
April 26th, 2005 at 9:43 am
Mike,
I read this book when it came out. I just happened to be at Barnes & Nobles when I caught a glance of it. I read it in two days…wasn’t blown away by it, but I must give it some credit. Because of The Automatic Millionaire, 5 of my Bank of America accounts are automatically to every week.
Automatic transfers are VERY convenient, and I suggest everyone use it for their savings accounts!
-Neville
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