The Automatic Millionaire by David Bach - Essay Example

The Latte Factor is a term to emphasize the non-necessity spending we do such as getting a latte every day which are simple things we spend on without thinking if we need them (Bach, D., 2003).
Chapter 3: Learn To Pay Yourself First
Chapter 3 centers on welcoming the idea of paying yourself first. “Paying Yourself” means setting aside a certain amount from one’s paycheck and putting it in one’s savings before one busies themselves with paying bills. This kind of habit will train someone to prioritize savings first and adjust one’s lifestyle accordingly (Bach, D., 2003).

Chapter 4: Now Make It Automatic
In line with the last chapter, this chapter makes sure it happens. Making sure you regularly deposit on your savings, has a lot to do with making things automatic such as directly making your company deposit a certain amount of your paycheck to your savings account. With this, your savings will never be sacrificed (Bach, D., 2003).
Chapter 5: Automate For A Rainy Day
This Chapter teaches us to be financially prepared for emergency spending. Just like we would automatically deposit on our savings account, one should also allot money for rainy days by opening a rainy day fund and/or investing money where it surely will grow (Bach, D., 2003).

Chapter 6: Automatic Debt-Free Home Ownership
This chapter impresses on the need to stop renting a home and take the plunge to buy one. This might be overwhelming but in doing the math, buying a house does not only lessen your spending in the long run but also increase your financial leverage and value (Bach, D., 2003).

Chapter 7: The Automatic Debt-Free Lifestyle
Get rid of your credit card. This chapter suggests doing this to start an automatic debt-free lifestyle. The rule of thumb in spending is if you cannot pay it in cash, you cannot afford it (Bach, D., 2003).
Chapter 8: Make A Difference With Automatic Tithing
This chapter teaches us that there is more to life than money. We should put a high value on which not only with regards to what we can get from it but rather what difference our money could do to help change the world for the better (Bach, D., 2003).

Overall, I loved the book “The Automatic Millionaire”. This is because it veers away from giving readers a set of principles and theories and instead focuses on the right kind of thinking and attitude toward achieving a rich life in all its forms. Not only does it deal with what one can get from one’s money but highlights the higher value of which that could make a difference in other people’s lives.

After everything I have learned, I plan to start by getting rid of my credit card. It makes sense that if one would need a credit card to buy something then it simply means that he or she does not afford to buy something yet.

My favorite quote in the book would be “Strive to be debt-free. Debt is a trap that forces us to work longer than we need to” (Bach, D., 2003, p8). This is the truth people do not realize about debts especially when loaning is much more convenient and efficient. Read More