I just finished The Automatic Millionaire by David Bach. I’ve read several of his other books, and decided it was time to read this one when I found it on the shelves of my local library.
The thing I enjoy about David’s writing style is how simple he makes things. He has a unique perspective of looking at finances, and relaying them in an easy to use fashion.
One of the biggest things I walked away with from this book is how to think rich, and how to share that knowledge with your children. He tells a story about a couple in their early 50’s ready to retire because of what their parents had taught them about money.
We Inherited Knowledge
is what the couple told David.
Basically, to retire rich at an early age, you need to:
1. Pay yourself first. Always put money away for yourself first before you pay the bills. Automate the process if possible.
2. Save a few dollars a day. They called it the cigarette factor – basically the latte factor – and you should eliminate one habit from your system, and use the money to pay yourself.
3. Buy a house and make two 1/2 payments every month instead of one big one. You pay off the house much quicker this way.
4. Don’t buy things on credit, minus your house. If you can’t pay for it, don’t buy it.
Pretty simple rules, and they make a lot of sense to me.
It’s a great book if your new to the whole finance/savings idea, or if you want a refresher on great ideas. (I never get bored reading similar items – I always pick up one or two new nuggets along the way!)