A Brief Review: The Automatic Millionaire ... Irregular Payments

A Brief Review: The Automatic Millionaire

25 Apr, 2005 Budget, Credit, Debt, Goals, Investing, Retirement

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David Bach’s The Automatic Millionaire, a book given to me over a year ago, finally made it into my reading queue because of my renewed interest in personal finance. (as an aside: Book stores are dangerous places for me and my wallet - I’ve got more than enough books to keep me occupied for a year or three, but I enter a book store and suddenly two or three must-haves find their way into my hands. There are certainly worse habits, I suppose!)

A quick read as far as money matters books go (two or three leisurely hours on a Sunday afternoon and she’s done), with some good common sense approaches to financial planning. The problem with so much of what is considered ‘common sense’ is that it’s often, well, commonly ignored, because it just seems so obvious that contemplating it would be a waste. So it’s always good to have someone clearly lay it all out for you.

The ideas presented are nothing at all truly innovative, just good little nuggets of common-sense, with the ever-so-slight twist of making it all as automatic as possible so that you don’t have to actively do much of anything to succeed after the initial set-up, such as:

Pay yourself first - divert as much pre-tax income into a retirement account as possible
Save for the rainy days - having something to cushion the unexpected blows will help to keep you on track
Pay off your mortgage as quickly as possible - ie. bi-weekly payments can shorten a 30-year loan by 7+ years
Don’t take on debt for things that lose value - ie. house = probably ok; that cool laptop you’ve been drooling over = probably not

Don’t go in expecting some grand investing theories or some get-rich-quick tripe or you’ll come away disappointed. Stick with this short book, though, and you’ll come away with some damn useful reminders, and a whole new angle that may just make it almost painlessly work for you.

5 Comments so far »

Kate said,

Wrote on April 26, 2005 @ 11:09 pm

Have you also read his book, Smart Couples Finish Rich? It’s a good, quick read that helps align goals since people can change over the course of 20+ years.
Sean said,

Wrote on April 26, 2005 @ 11:55 pm

Can’t say I have as of yet - and with the backlog of books I’ve got going, it may be awhile before I get around to another of his. Of course, it being a quick read and all, it’s not like it’d take me a couple weeks to drag my way through it, so you never know, might have to pick it up.

But at least for the near term, I’m thinking I should probably avoid bookstores…
Irregular Payments » Thinking Aloud on Tax Efficiency and Investing for Retirement said,

Wrote on April 27, 2005 @ 3:09 pm

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