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Author: David Bach | Publisher: Currency, Random House LLC

You can learn how to automate becoming a millionaire in a little over 2-hours, or at least that’s how long it took me — a flight from Austin to Chicago — to finish David Bach’s The Automatic Millionaire: A One Step Plan to Live and Finish Rich. Want the #CheatCode to the “one step”? It’s automation. Yes, that’s it. The one-step plan to becoming a millionaire within your lifetime? Pay yourself first and make it automatic.

Thank me later. Now for those of you that want a more detailed review…

In just over eight chapters, David outlines a simple, action-oriented process to not only ensure you obtain financial wellness but that you can do so by automating the process in a little under one hour of your personal time. To put this into context, most people will spend 40+ working years avoiding a 60-minute process that will automatically ensure their financial security by retirement age.

I’m not great at math but one hour seems like less than 40-years, so I suggest you become one of the former people.

There are good excuses and there are bad excuses. The one thing they both have in common is they are excuses. Many believe their life circumstances are a unique unicorn, unlike anyone else’s on Earth, and therefore, no advice — whether it takes an hour or 40+ working years — is significant enough to address all of the life experiences and specific difficulties that have happened to them and them alone. They, on average, live paycheck-to-paycheck. But, as any brokerage firm disclamier will tell you: past performance does not guarantee future results.

If this sounds like a lifestyle you’d like to be accustomed to through your ‘golden years,’ then, by all means, do not change a thing. I wish you 1,000 years of continued success! If you want to automate your way to saving 1x your income and securing financial freedom within your lifetime, then this book teaches you how.

The Automatic Millionaire

“If it’s so easy to become an Automatic Millionaire, why don’t more people do it? The answer is human nature. Most people simply don’t do the thing they know they should.” – David Bach

Just because it’s easy, doesn’t mean it’s quick and improbable shouldn’t be confused with impossible. As with all things, there is a catch to The Automatic Millionaire’s system.

The Good News: The math supports that most households in America in a low to moderate cost of living area can amass significant wealth if they make at least $30,000 in gross income and save at least 10% pretax during their working career. Given that the median household income is $50,000+ and a single person’s median income is $30,000+ this seems manageable.

The Bad News: This same math also supports that it will take most of us an entire lifetime to amass wealth (high net worth).

Even billionaire street lyrist, Sean Carter — whom you may know as Jay dash Z — was baffled by the idea of living rich and dying broke, “Financial freedom my only hope.”

If the time is going to pass anyway, how can you and I better plan to become financially secure? Even if financial security doesn’t occur until we’re in our 60s, on average, we would still have another almost two decades of life to enjoy it. The real question: is it better to be financially secure at age 67 or age sixty-never?

If self-improvement isn’t motivation enough, which is fine by the way, let’s take another position. If we assume the children are our future, then by extension generational wealth is their security. Perhaps the motivation to become the first (or next) in your family to pass on wealth is a motivational factor?

Here is The Automatic Millionaire’s 7-step plan to establishing wealth:

  1. Automate the process (for the Millennial readers: Trust the Process)
  2. Find your “Latte Factor” (aka stop wasting money on small items, every day)
  3. Pay Yourself First
  5. Create a Rainy Day Fund (1 – 3 months savings)
  6. Automate Early Debt-Free Homeownership (by making 26 biweekly payments a year versus 12-monthly)
    • On average, during the first 10 years of your loan, more than 90% of your payments only go to paying the interest. Over the course of a 30-year loan, extra biweekly payments can help you pay off your loan 7-10 years earlier depending on your interest rate.
  7. Automate Your Debt Free Plan
    • Paying the minimum payment only, an average household debt of $8,400 at 18% interest would cost $20,615 and take 30-years.

If you want to be a millionaire, David says you only need to do three specific things:

  1. Pay Yourself First at 10% of what you earn (pretax)
  2. Make it Automatic
  3. Buy a Home and Pay it Off Early

“In order to become an Automatic Millionaire, you’ve got to accept the idea that regardless of the size of your paycheck, you probably already make enough money to become rich.” – David Bach

There’s a Better Way to Get Rich Than Budgeting

Personal finance doesn’t have to be complicated to be right, and you may not even need a budget. Budgets, or any system, that requires the control of human impulse will fail according to The Automatic Millionaire because people don’t want to be controlled. People want to be in control.

Becoming rich requires nothing more than committing and sticking to a systematic savings and investment plan.”

I know you’re thinking, “It has to be more complicated than that!”

All your life you had to fight, and the cognitive dissonance brewing in your head that a one-hour, 7-step plan can guarantee you and your loved ones financial freedom is almost as insulting to your intelligence as it is offensive to your ego. Well, you’re right. Neither David or I can guarantee results. What I can guarantee is doing what you’ve done in the past will guarantee the same results in the future. Whereas following this system will automatically improve the odds you will accumulate more wealth than 90% of the population.

David provides this simple breakdown:

  • Dead Broke: Do nothing.
  • Poor: Spend everything you make each month and save nothing.
  • Middle Class: Pay Yourself First at 5 – 10%
  • Upper Middle Class: Pay Yourself First at 10 – 15%
  • Rich: Pay Yourself First at 15 – 20%
  • Rich Enough to Retire Early: Pay Yourself First at 20% or more
    • “You should never invest more than 25% of your retirement money in your own company’s stock.” – David

But, if you still disagree, please direct all your angry emails with detailed points of contention to David Bach at success@finishrich.com where I’m sure he’ll be happy to promptly ignore you.

Rent versus Buy

In full disclosure, I do disagree with one piece of advice: Step 6 – Homeownership.

We discussed why on PB48: Renting vs. Buying so I won’t rehash here. No one’s perfect! (Editor’s Note: If you follow David’s advice to pay off your mortgage early, please at least make sure you get your lender/mortgage to agree in writing that youre extra payment(s) will apply towards your principle.)

This is not the first time I’ve disagreed with someone’s advice and it won’t be the last. However, this quick read does prove that with a little bit of financial focus and a lot of bit of automation, the average person can build up to millions in net worth over a 30 year period.


If you don’t like the results, you can always go back to whatever system you were using. If this book is wrong and you don’t like having financial security, then you can always return to what you were doing before, which is likely nothing at all. Doing nothing is only slightly less difficult than automating your financial plan and it will make you a lot less money.

[bctt tweet=”If the no plan plan hasn’t worked for you in the past, try planning for the future instead.” username=”PayBalances”]

No plan is still a plan, it’s just not a very good one. The advice provided in David’s book is simple, but it is a do something plan versus a do nothing plan. You could try his advice of tracking your expenses for one day (or week), then automate the savings you identify in any areas of excessive spending by making a personal commitment to max out your employer match or save up to 10% of your gross income (even starting at 1% is better than 0%). This act alone would set you apart from 60% of people.


A quick editor’s note: There is a gulf between poverty and broke not addressed in the book. To be fair, this is typically not covered in most financial discussions. One exception is this quick read: People Who Have Never Lived In Poverty Should Stop Telling Poor People What To Do.

In my opinion, poverty is systemic, not situational. Poverty tends to take multiple generations, the support of outside entities and coordinated efforts to escape. Most folks are not poor. They are broke. The latter is typically within your control to change if it is a priority. Even if it’s a low priority, this book suggests that you can automate your way into financial discipline, and I agree. Put simply, to be poor is to be unable to afford what you need. To be broke is to be unable to afford what you want. This is like the difference between passing on breakfast and lunch so maybe you can afford a big dinner versus not knowing when you’ll be able to afford your next meal.

I’m not dismissing the immobility of poverty, nor am I suggesting the book does a good or bad job of addressing it. Based on my read, the subject is simply not discussed. I don’t view this book as an instructional guide for escaping poverty. The advice seems to assume you make decent money, but you manage it poorly (or not at all). Within the scope of this limitation, it is a great book and if you have the time, I suggest you read it and immediately apply what you learn.