The Automatic Millionaire by David Bach is one of the first personal finance books that I read where the ideas really clicked with me.
I was inspired to set up a savings account to pay myself first, and once I saw how well it worked, I shifted more and more of my finances to automatic.
What would it be like to achieve financial freedom without the daily pressure of relying on your willpower to pay debts or save money? This book can change the way you think about becoming rich.
Many people think that getting rich is making more money. We all know that the more we earn the more we tend to spend, which makes it really hard to save.
David Bach talks about becoming rich by spending less than we earn and saving the difference.
The Latte Factor
One thing David Bach is famous for is the latte factor, which talks about how much you could save by making a single daily change – by cutting out your daily latte, for example, you could save money. Everyone has a latte factor. Whether yours is buying magazines, or eating out, it’s a habit of slowing spending money in small amounts that add up over time.
Make it Automatic
The Automatic Millionaire discusses concepts such as living frugally, reducing or eliminating debt and paying yourself first.
These are all valid ways to get on track to financial freedom; however they require some persistence and willpower on the part of the individual. The Automatic Millionaire suggests that you bypass yourself by making it automatic.
Automatic is one of my favorite ideas for saving and paying off debt and this book takes it to the ultimate level. This method removes the need to make the same decision again and again. You decide that you want to save a certain amount monthly, set it up automatically and it’s done.
Your goal may not to become a millionaire, but the ideas in this book can get you there if you put them into use early enough. And if you are not starting early, it’s OK, because this book will help you kick start your savings.
Have you experienced the power of the Automatic Millionaire? Tell us what has worked for you.
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