Automatic Millionaire by David Bach – 7 Tips

automatic millionaire

Automatic Millionaire by David Bach

Very easy to read book with some very good ideas:

1. People aren’t taught these principals in school. He is right most people aren’t taught how to handle money in the public schools. The only way I was taught this information was to take accounting classes and by reading lots of personal finance books.

2. He talks about “The Latte Factor”, saving a few dollars or wasting a few dollars will cost you dearly over along period of time. Example: $3.50 a day for a latte would cost you $1260 per year and $12,600 per decade. That is a lot of money to save or to waste.

3. Pay yourself first. Make your savings automatic such as a retirement plan, IRA or 401K. Retirement monies can be put away with tax free dollars which will amplify your retirement over time.

4. He talks about automatic savings for a rainy day. Put away 3 to 6 months of savings for a rainy day emergency fund. This all depends on your comfort level. The more I have set aside the more I feel comfortable.

5. He recommends that if you are in debt that you set aside one month for an emergency fund, then pay off your high interest debt and then set aside the other 2 to 6 months for your emergency fund.

6. Automate your house payments and add some extra payments periodically to save a bunch of interest over the 15 or 30 years that you have the loan.

7. Pay down your high interest credit cards, check your interest rates, ask for a lower rate, consolidate several cards and shop the competition to become an automatic millionaire.

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