This post is the latest in my series on the Best Personal Finance Books of All Time.
As a refresher, we’ve already covered:
Today we’ll discuss The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich
, a simple but powerful book.
Overview
One of the best overviews of the Automatic Millionaire (AM) that I’ve ever seen comes from another book. 50 Prosperity Classics
lists the summary of AM as follows:
There is no easier or surer way of attaining wealth than through the habit of paying yourself first through automatic deductions.
This is a stunningly simple but powerfully effective concept and what makes this book a favorite of mine.
My Experience
I first read AM when it came out over ten years ago. I loved it because of the simple yet powerful theme. Yes, the book does have 200+ other pages of great financial tips, but the heart of its message is to save automatically.
The book got me to take savings automation seriously. I estimated the amount I could save each month, then set those amounts to automatically move from my paycheck (or checking account) to my investment accounts and 401k. The savings kept piling on paycheck after paycheck, year after year with absolutely zero extra effort from me. Ten years later, those amounts have added up to a very tidy sum.
More Thoughts
50 Prosperity Classics also lists a couple key quotes in AM that are worth noting. The first is:
“In order to become an Automatic Millionaire, you’ve got to accept the idea that regardless of the size of your salary, you probably already earn enough money to become rich. I can’t stress enough the importance of believing this — not just with your mind but with your heart as well. It’s an ‘Aha!’ moment that can truly change your life financially.”
I’ve heard of people becoming millionaires on salaries of $30k a year and heard of others making multi-millions and going broke. In the end it comes down to the fact that you must spend less than you earn (whatever you earn) if you want to become wealthy. And the more you grow the gap between earning and spending, the wealthier you’ll be!
The second quote is as follows:
“Please trust me on this. Nothing will help you achieve wealth until you decide to Pay Yourself First. Nothing. You can read every book, listen to every tape program, order every motivational product, subscribe to every newsletter there is, and none of it will get you anywhere if you let the government and everyone else have first crack at your salary before you get to it. The foundation of wealth building is Pay Yourself First.”
You must save first (or save right after giving as some recommend). You can’t spend all you want and then “save” whatever is leftover because it’s highly likely there will be nothing leftover.
As I said, it’s a pretty simple book (and an easy read). But it has a few, powerful concepts that when followed will help you increase your wealth substantially.
Anyone else ever read this book? Thoughts on it?
I really enjoy the straight forward quotes that these certain points bring to our attention. Ideas and plans are easy to come up with but the implementation is difficult to accomplish. MY INPUT IS TO HAVE STAMINA. Once started, leave it in place and in years to come you will be pleasingly surprised. I did !
Also remember, the sooner you start (at any age) the more time it has to work for you.
It is a deceivingly powerful principle, to pay oneself first. It seems too easy or trite perhaps, but boy does it work. Pay yourself first, automatically, then make sure you don’t spend more than you have left. Once people get that concept, the rest is easy!
I believe I have been doing some of this ever since I had a job and it is a very powerful tool.
FYI if you are interested in any book you can usually down load a free sample to your smart phone. I have a Android based phone so you can download a free sample of the book from Google Play which is usually the first chapter or more. I find this book an easy read and something I will see about getting from the library to finish reading.
If I really like it I will recommend it to my son’s.
For me while it’s a great starter book and does focus on automating the habit, at the same time there’s a lot more books that go in depth and focus on the mindset as well..
Decent book though and thanks for the review ESI! Keep it up man 馃檪