The Automatic Millionaire
David Bach
Copyright 2003, 2005, 2016
Read: 4/11/2021
My Rating: 5/5
Do you want to skip to the end an just read the recommendations?
- Setup an automatic investment plan with your companies 401k. Invest at least 10%. Repeat.
About 19 years ago I read "Smart Couple finish Rich" also by David Bach and rated it a 3/5. While looking for other good introductory finance books to recommend I kept running across this one and thought I would give it a read and also see if my options on David Back had changed.
The first example of the book is an introduction to the McIntyres. Your "example case" family. I really think Bach plays way to fast and loose with the numbers here and I'm going to rate this as just "barely possible" and in no way is "plausible". It's also very cringe worthy with it's unicorns and rainbows.
All of that being said, the literal million dollar question is "does this matter?".
This is definitely what I would call a "Finance 101" book. It's not incredibly detailed and doesn't delve into the nitty gritty of finances. And there is no such thing as a grey area.
Then again, that’s not the purpose of this book. The purpose here is to inspire the reader to take those first steps. To "automatically" have a small amount of their salary invested in a 401k or other mutual fund on a consistent basis.
If that is the goal, then I'm going to say, yes I can recommend this book. Of course I'm going to have some caveats and disagree with many of the specifics, but in the end the difference between winning and losing the retirement game is really nothing more than playing or not playing. If you save at least 10% of your gross salary in your companies 401k in something nice and boring (like a lifestyle or retirement date fund), you will do fine when you are 65, end of story.
The book was first written in 2003, and later updated in 2005, and 2016, so there are a few things that are a bit dated, but by in large these are more amusing then problems. I love how when he lists Mutual fund companies he starts with phone numbers, not websites. And, when he mentions his eureka moment and when he started investing the first thing he did was to "call his bank and setup and automatic withdrawal from his savings account". And lines like "remember when you call your bank to ask about automatic plans".
So yes, it has a few issues, but at the end of the day, you can do far worse for your first "finance 101" book.