The Automatic Millionaire

Despite its sensational title, David Bach's The Automatic Millionaire: A Powerful One-step Plan to Live and Finish Rich is not a get-rich-quick guide. It's a straightforward march through common-sense personal financial planning that suggests readers "automate" their contributions to retirement and investment vehicles. Bach, in fact, calls his model the "tortoise approach" to becoming wealthy by retirement age. In the early part of the book Bach builds on ideas he established in Smart Women Finish Rich. His core principle is that to succeed you must "Pay Yourself First." In other words, he suggests setting aside a fixed monthly sum before considering what is left for living expenses. The "automatic" part of the title comes from Bach's emphasis on using automated payroll deductions to avoid the temptation of using the money to pay today's bills. Bach insists that "regardless of the size of your pay cheque, you probably already make enough money to become rich." But his claim that his plan requires "no budget, no discipline" is a bit disingenuous. His discussion of the "The Latte Factor" shows that to find money to start a retirement plan, a person with a modest income needs to make an up-front commitment to stop accruing debt and to reduce spending on such "wasteful" items as lattes and cigarettes.

In the end The Automatic Millionaire does not offer much that is new for readers already familiar with personal finance basics such as accelerated mortgage payments, "the miracle of compound interest," and the setting up of emergency funds. But, for those just starting with financial planning, Bach provides a host of resources to put recommendations into action. He walks his readers through such fundamentals as shopping for interest rates, creating a balanced retirement portfolio and consolidating debt. Bach's conversational style will make this quick read highly palatable for those daunted by more detailed investment and personal finance titles. --Patrick O'Kelley, Amazon.com

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read and loved! - Rated
i have read a few of these type of books and this is by far my favourite one! i am 22 and i'm in an early stages of a career that i hate but making really good money. after reading this book, my spirit was lifted and i feel there's hope for me still! if a normal person with normal wages can do what it says they can do, then it'll be a cinch for me! i am young, with no loans or debts to pay and i feel like i've gained a huge advantage after reading this wonderful book.

this book is well written, so easy to read and entertaining with real life anecdotes. i couldn't put the book down and read it in one sitting. the best book for beginners, especially those who lacks the knowledge of financial jargons.

get it. read it. love it.

Won't suit everyone but good for what it is... - Rated
The Automatic Millionaire outlines a method of becoming rich through a combination of scrimping and saving - despite its dynamic, exciting title, that really is all there is to it. The "automatic" part is no more than advising the reader to set up standing orders, direct debits or deductions from monthly wages, straight into a savings account (so you're not tempted to spend it). That's it.

The outlined strategy will work IF you start young enough. The examples given assume the aspiring millionaire is in their early 20s - plenty of time to make £1m through the power of compound interest - but too late for many people.

My main disappointment with the book is that the strategy outlined is for the long-run (40-50 years) so you'll be about 65 when you make that million. For anyone looking for a faster alternative, this isn't it.

However, if time is on your side and have no idea where to start, I would recommend you get this book and follow its strategy (about savings in particular, not sure I agree with the pensions advice). Doing so will virtually guarantee financial security upon retirement. But if you want a strategy that delivers faster-returns, look elsewhere.

In summary, the book outlines sensible (albeit widely-known) principles of personal money management so it's valuable for those who have no idea where to begin. But if you're already pretty savvy about "paying yourself first" and watching the pennies or if you want a faster route to that million, you will get limited value from this book.

EXCELLENT! - Rated
i am turning 27 on sunday and have nothing to say for myself financially. i owe £2000 and have £90 in savings. i havent had a proper job in 4 years. after already making the decision to suck it up and get a proper job, i picked this book up quite by chance. i read a couple pages and found it quick and easy and i was hooked. i am now DOUBLY hooked on sorting my life out. i plan to look for a home to buy next year and i know i can do it. this book doesnt to tell you to do the same thing all the other zillions of finance books do, its approach is so simple and uncomplicated and easy, that we can all stop worrying about our futures. bravo!

Very well written, but not for everyone. - Rated
Over the past few years, I've bought and read several books on the theme of how to get rich. I have observed that these kinds of books come in three flavours;

1. Get rich by scrimping and saving (eg, "The Money Diet")
2. Get rich by making bold investments (eg, "Rich Dad Poor Dad")
3. Concepts on how to get rich (eg, "Think and grow rich")

The automatic millionaire is very much of the first flavour (scrimping and saving). In fairness, the author does a good job of disguising the fact that his approach amounts to little more than scrimping and saving by making his particular process "automatic" (I won't spoil the book too much by explaining what that means).

At the start of the book, the author describes a meeting he once once had with a couple of retired automatic millionaires, whose names escape me. He describes in depth how happy this married couple were now that they had held down steady (apparently low paid) jobs all their lives and were now reaping the benifits of many decades of savings and conservative investments. We learn about how they have two homes (one that they live in and one that they rent out) and how the husband drives a second hand car. We also are reminded over and over about how joyful and full of romance and wide eyed wonder this ageing couple seem to be now that they're cashing on their healthy pension schemes.

Whilst, I do not question that the automatic millionaire process has clearly paid off for these people, I was struck with a distinct feeling of disappointment as I read their story. Personally speaking, I find it very difficult to get excited about the idea of saving for the rest of my working life in the hope that I can life off a pension some day and drive second hand cars, like our happy couple described in the book. For me, this couple were precise examples of how I absolutely do NOT want to end up- maybe my expectations were too high going into this book!

Anyway, for what it's worth I have one or two other issues with the book that are of a slightly more academic nature. Although I'm no economics professor, I have read credible predictions of an impending stock market crash in the future when a tidal wave of elderly retired workers try to cash in on their pension schemes. Here in the UK, the government is on the verge of forcing everyone into signing up for pensions schemes. You don't have to be a mathematical genius to realise that the figures don't add up- surely we can't ALL get 10% interest rates on our pensions, as the author insists we can. Can we? I also think that his approach is dependant on you and I being able to generate a steady income (i.e., hold down stable jobs) until we retire in our fifties and sixties. Again, without trying to lecture too much or sound too negative, I think we live in an age where life long job security is something that is no longer on the table. So, personally I would put the case that the automatic millionaire process may not be as stable and as surefire as the author would lead us to believe.

Anyway, on a more positive note, the book is very well written and the author does a great job of keeping the subject both interesting and educational. In particular some of the mathematic models he presents are extremely eye opening and well presented.

In conclusion I would say this is a good book is you're a conservative, non risk taking, worker ant. However, for a faster, more exciting and (admittedly!) more risky road to richness I would be tempted to look elsewhere.

Hmmm - Rated
This book would suit beginners in finance. It got confusing with amounts been shown in $ then £ and sometimes both. Would have appreciated it more if all amounts was converted to £ and not the mixture contained. Even the web site suggested for forecasting is in $. Two stars given for information contained for beginners.