Book Review: "The Automatic Millionaire" by David Bach

“The Automatic Millionaire” by David Bach is a refreshing, easy-to-read primer on the author’s three point plan for achieving wealth: 1) Pay yourself first in tax-free income. 2) Make it automatic. 3) Become a home owner.
That’s the entire plan. Sign up for an IRA or 401K so you’re paying yourself first before any taxes are deducted and then let that money help grow your wealth with compound interest. Make the process automatic so you never have to think about it. Stop renting and start owning. Once those three steps are done, all that’s left is to do is sit back, relax, and become a millionaire.
The beauty of Bach’s plan lies in its simplicity and the knowledge that anyone – and, yes, he means anyone – can become a millionaire regardless of how much they earn. As Bach explains it, it’s not how much one earns, but how much one spends that determines their financial future.
How much should a person pay them-self first? It depends on their goal. Bach includes a chart that breaks it down thusly:
If you wish to be…
Dead Broke: Don’t pay yourself first.
Poor: Think about paying yourself first, but don’t actually do it.
Middle Class: Pay yourself first 5-10% of your gross income.
Upper Middle Class: Pay yourself first 10-15% of your gross income.
Rich: Pay yourself first 15-20% of your gross income.
Rich Enough to Retire Early: Pay yourself first at least 20% of your gross income.
Included in the book is the author’s “secret” plan for paying off a 30 year mortgage in only 20 years, and why you should.
Bach has a talent for explaining complex financial information in simple terms. If you want to become wealthy, at any age and regardless of income, this is the book for you. I highly recommend it.

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Thanks, Mike. We can all benefit from such good advice.

Auntie Lulu
Auntie Lulu

Excellent post! Now, we just need to rein ourselves in and D-O I-T !!! Far to many people will live in poverty in their old age because they have not been willing to sacrifice to provide for their own old age. Far to many look to the government to confiscate the fruits of others’ labor to keep them when they are old, since they have piddled away both the means and the time to prepare. To many think they need a new car every 2-3 years. My last car I drove for 17 years, then I got a fabulous Toyota… Read more »

Dr. Eowyn

Simply put, it’s the “miracle” of compound interest, although it’s more difficult nowadays because the federal reserve artificially keeps the interest rate very low (because of the gargantuan national debt), which means the interest rates on CDs and treasury bonds & notes barely go above 1%. But that too will change in the future.
See also:
And Mike’s previous post:
And here’s a quiz to find out if you will be a millionaire:


This was a statist conspiracy to withhold this information from me and the millions of minority baby boomers.
Thank goodness this fine Democratic author broke the reign of silence. Chapter 14 reveals the little know fact that along with a increase of 20% in benefits ACA also provides for welfare recipients to be automatically enrolled in a 401k plan and given a house. That is if you hadn’t already received a free house already.


I read this book over a decade ago and have been paying myself first and making things automatic ever since. I have found that many of the Surprise Millionaires I profile in my blog have done the same. It really works!


That’s excellent! Thanks for sharing!