The Automatic Millionaire : A Powerful One-Step Plan to Live and Finish Rich

     Ever heard of the Latte Factor? In The Automatic Millionaire, the Latte Factor is presented among a rich discussion of how to become wealthy by the time you reach retirment age. David Bach suggests in this book that getting rich takes time and effort, not necessarily a higher paying job. Although a higher paying job would be great, it is likely that the higher paying job would just lead you to spending more. The end result would be no more savings and no extra retirement planning.
     The Latte Factor is described as a way to save money for your future by cutting out the things that you don’t really need. For example, do you really need the Starbucks Latte every day? This costs you $3.50/day. Sure on a day to day basis it’s no big deal, but what about over time? This turns into $12,600 in ten years. Now what about that money if it were sitting in a retirement account and accruing interest? That would be worth a heck of a lot more by the time you retire. Bach’s discussion about this is rather eye opening as he suggests that every time you drink that Latte you are spending money from your future.
     Another big topic from this book looks at human nature and it’s impact on saving money and spending money. He insists that you make sure that you pay yourself first. Make sure you put money away for your future first and then pay everyone else. He suggests a great method for doing this so that you don’t even realize you’re are doing it.

     One last point to stress about this book is that Bach suggests that one great way to head towards being wealthy is to be a home owner. He provides some startling statistics about the average renter in the U.S. has a networth of less than $5,000 whereas the average homeowner has an average networth of over $175,000.
     This book is an easy read and great for people who are just starting out on their own from their parents, graduating from college, or still thinking of buying a home. Although, with the number of people struggling to make ends meets, the awareness and techniques that David Bach presents could make a difference for just about everyone.
     Despite its title, David Bach’s The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich is not a get-rich-quick guidebook. Rather, the book presents a straightforward approach using personal make sense financial planning through automated methods. Bach, in fact, calls his model the "tortoise approach" to becoming wealthy by retirement age.
     Incidently, David Bach had conducted a U.S. nationwide tour with Wells Fargo where he was selling/giving away/speaking about this book. Also this book was highlighted and recommended by Oprah. recommends this book.
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The Automatic Millionaire : One-Step Plan to Live and Finish Rich