Most helpful positive review
194 of 200 people found the following review helpful
Not necessarily new, but worth reminding
on February 8, 2004
Some of what Dave Bach talks about here is not new. And that should not be news to anyone who has actually read the book, not just the free stuff on the internet and wanted to write a review and state their opinion.
I had an uncle who sold insurance and he always taught us to save 10% of our money. He taught this to his kids and he taught it to his nephews and nieces too. Guess how many did it?
In The Automatic Millionaire, Bach's core principle is to pay yourself first. Stanley and Danko talk about this in The Millionaire Next Door. Givens taught this in More Wealth Without Risk and George Clason is perhaps the best known for teaching this in The Richest Man in Bablyon. Once again, it's not news, but how many people do it?
Bach suggests using pretax retirement accounts like your 401 (k), IRA, SEP-IRA, ROTH IRA, SOLO 401 (k) to set aside a fixed monthly sum of money before considering what is left for living expences.
By taking advantage of payroll deductions, money can be invested automatically and you won't even miss it. For example, employees can have money automatically going into their companies 401 (k) and through money link have money going into their IRA. Just like a bill, except you are paying yourself first.
By contributing to an IRA, you can also complete a new w-4 and claim your IRA increasing your take home pay while you increase your investments.
Thanks to Pres. Bush's plan to raise the amount that can be contributed to retirement plans and makeup provisions, Americans have the best opportunity ever to create tax deferred wealth.
The other principle that Bach talks about is his "latte factor."
Bach insists that many people are wasting money on "lattes." Got to have that bottled water, go out for lunch everyday, hit the soda machine several times per day, cigerettes, candy, stop at a 7-11 for gas and got to get a snack, buy something new to keep up with our peers etc., etc.
And these are the people that say they have no money to invest. In this regard, people are wasting money just to live a little better than they should be.
And I am not pointing fingers. I was there too and I had training! 19 years ago, I started accumating wealth and self help books. One of the first was The Richest Man in Bablyon. I made dramatic progress. Then around 4 years ago, after years of being sloppy, I lost it. I felt that I had read it all, been there done that. I gave my books away. Amazing when you think you know it all, you really don't and horrible things start to happen.
I was living on 125% of income. When my company closed down, I had to raid my 401 (k) and IRA accounts untill they were gone. Then reality set in and I had to start over.
People who think they have already heard this before, how are you doing financially? Truthfully. My guess is that many are living in denial. If you are already doing well, congratulations. You are one of the few that are.
Getting back to The Automatic Millionaire, Bach reveals "regardless of the size of your paycheck, you probably already make enough to become rich." Bach goes on to say that his plan requires "no budget, no discipline," is a bit disingenuous i.e. his "latte factor" A person with a modest income needs to make an up front committment to stop acruing debt, to reduce spending on such wasteful items as lattes and cigerettes and to begin investing.
Fans of 1,000 page financial books (mostly worthless filler) will probably find Bach's book vanilla, too simple, too easy. But guys, it's working. It's what people really need. Not a huge 1,000 page tome that people won't read and doesn't work anyway.
I highly recommend The Automatic Millionaire that will set you on the road to wealth and show you how to make the most of your money automatically.