Automatic Millionaire Issues - Essay Example

This means that one does not have to make a lot of money to be rich. He also claims that no discipline is required in acquiring wealth if one puts into place the necessary mechanisms he outlines. Contrary to most theories on becoming rich, the writer gives hope to the employed that they too can get rich without having to start their own business.  The formula of getting rich is through saving a few dollars a day, which over time if invested properly promises wealth. An amazing and transforming theory of paying oneself first and then the bills and debts are worth keeping. The writer is also all for home ownership, which will increase one's equity. All these recommended steps must be automated to work through standing bank orders.

This chapter gives the story of an amazing millionaire couple who went out of their way to attend meetings on how to become rich yet by all standards, they were already rich. Mr. and Mrs. Mclyntyres the couple under review lived a debt-free life and had automated all their financial transactions in such a way that all expenses were paid on time. This ensured that the couple did not have to pay extra money from fines incurred from late payment of expenses. They both quit smoking and used the money they would have used per month towards their savings. They also invested heavily in retirement funds that earned great interest and which ensured that they were not taxed until they used their money in the future. They bought used cars and boats and used their old house as equity to buy their new home. The old house earned them income through rent.

The Latte factor is simply taking the money that would have been used for buying a latte and saving that money. The latter is representative of any other item that could be used to save.  The writer recommends saving such monies.

The writer recommends that a person should pay himself or herself first before they pay bills, or debts, or give to charity. Such monies should then be invested in mutual funds, retirement funds, government bonds, or any other high-yield funds to earn profit that will be saved for the future. This should be automated so that the monies from the bank just go directly to the funds.

Automation of all transactions is key to ensuring that there is no defaulting on financial commitments. It also ensures that all payments are made on time and that no late fees are incurred.

The writer recommends at least six months' worth of one’s total monthly expenditure in savings to cushion against emergencies like the loss of a job or illness. The more one can save the better. The savings to this account should be automated to ensure that one does not postpone setting aside savings. He recommends setting aside five to ten percent of income per month for this purpose.

I liked the book because of its uniqueness from other “how to get rich” books, which more often than not advocate for self-entrepreneurship. In my opinion, it is much easier to adopt a financial regimen, which entails conscious spending and saving money rather than starting a unique new business guaranteed to generate wealth. I found the book to be very helpful. I found the “pay yourself first theory” and the automation of all transactions to be something that I will put into practice. Increasing the amount of money towards retirement is something that needs to be emphasized even in the early years. The most influential quote from the book to me was: “you are the greatest tenant in the world” (Bach, 27). This quote advocate for owning a home instead of renting one.