The Automatic Millionaire by Dave Bach is a little book with one big idea: you are too lazy to budget. Instead of planning a budget, you should automatically deduct savings and retirement from your paycheck. According to The Automatic Millionaire, this is the most fool-proof way to build wealth, and you’ll live off of the remaining money more easily than you imagine.

The Automatic Millionaire is the book that brought the world ‘The Latte Factor’ — the idea that small, daily costs drain your money like leaches. To those unfamiliar with compound interest, the Latte Factor is shocking. Forgoing a $4 cup of coffee daily and instead investing the money, yields $263,000 after thirty years. Bach has a Latte Factor Calculator on his website where you can adjust the numbers to your situation.

Bach does a good job of stressing the importance of setting your financial system on autopilot in order to remove what is always the weakest and least reliable link in executing a plan: you. Internalizing this idea can mean the difference between retiring comfortably and working until you die.

While I liked the book, the style has a quality of breathless excitement that annoyed me. Rather than just tell the reader his ideas, Bach has a quasi-fictional couple from whom the author learned all his secrets relay their story instead. This wouldn’t be a problem except that Bach has a tin ear for the rhythm of a conversation.

Perhaps this is the teacher side of me flaring with anger, but the author repulsed me when he claimed not to be a ‘math whiz’. Sure, not everyone is Ramanujan but if you’re writing about finances, I expect better of you than to dismiss math skills with the rest of the hoi polloi

To increase the book from its natural, pamphlet size, Bach included lots of needless filler. Bizarrely this includes multipage lists of websites and their descriptions. One such list covered practically the entire international banking industry naming each company with a paragraph of services available online.

Still, the book is relatively short for the genre and can be easily read in an afternoon. One very nice feature is that Bach motivates the reader to take action immediately. Each chapter finishes with a clear and actionable checklist of things to do to set up your finances in accordance with the system.

Click here to buy a copy of The Automatic Millionaire

--

Header photograph by OiMax