Last week I did a review on Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! I shared with everyone how inspiring and humorous the book was, but most importantly how it totally changed our thinking towards money and making it work for us instead of the other way around.
Today there’s another book I’d like to do book review on that has also revolutionized our lives: The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich, by David Bach. You may be wondering why I’m recommending yet another book? I’m a huge advocate of continuing education and the necessity to learn from every perspective possible. While I’m very fond of each author, I do not believe that they are the only ones with all the answers. There are many avenues to making your money work for you and to get rich. I strive to learn them all. The more avenues we can learn and find to wealth the quicker we can get to our goal.
Now, on to the book.
Make it Automatic. My favorite part about this book is that it’s comprehensive and simple. If you want to ensure yourself a future, then make it automatic, is David Bach’s motto. With the advent of technology and the internet it is very very simply to set everything up so that money comes out of your paycheck automatically and goes straight into a 401(k) plan, savings account, and towards paying bills before you ever see your money.
That way you’re not tempted to spend your money on other things before you have to pay your bills. While you sleep your money grows on its own provided you have set it up to be automatic. It may seem overwhelming at first, but as things adjust you’ll soon see just how simple it really is. You just get used to letting technology pay for your bills itself while you get the rest of the money you need for your daily living. What brilliance!!!
The Latte Factor. If you’ve never heard of this thing called the latte factor then take a look at this video…it speaks for itself:
We ALL have a latte factor: cigarets, tobacco, music, and of course lattes from our favorite coffee shop. As for me and my house, my weakness is eating out. If I’m not careful, I can end up spending hundreds of dollars a month on restaurants. I haven’t given up eating out completely, but since I’ve cut back a ton I am amazed with how much money I end up saving over the course of a year (about *cough* $3600 total).
Find out what your latte factor is, cut it back, put that extra money towards your bills and savings, make your bills automatic, and watch how your wealth will grow!
No budgeting necessary. Gasp!!! OMG! Did she just say you don’t have to budget?!?! That’s right, I did say it. If you set up all your bills to automatically come out of your paycheck before you even see your money then the only expenses you’ll need to worry about are things like groceries, gas, power, water, and other miscellaneous expenses. David Bach explains all of this in the book thoroughly, so read it before actually doing it so you know exactly what you’re getting into before you try it.
What we’re doing. I’m a huge advocate of budgeting and the thought of completely throwing it out the window is a bit daunting to me, so I’ll be keeping mine for a while. In fact, I still think it’s a good practice to have a budget, even if you just have a few miscellaneous expenses to keep track of. So I don’t foresee dropping it totally. What will probably end up happening is as we add more of our bills to automatic payments and things reset I’ll slowly delete them from my budget until I’m only keeping track of expenses that change on a monthly basis. I’ll keep ya’ll posted on this one.
We just got through reading this book, so we’re starting out slow. We’ve already set up a 401(k) plan for hubby and are putting a small amount of money into savings every month until we feel safe enough to add more. I’m sure it’ll surprise us with how easy it really is to adjust to that money not coming in every month.
If you’ve read this book then feel free to add whatever you want to the comments below!
Next up in this series: More Money Will NOT Solve Your Problems!
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