"The Automatic Millionaire" by David Bach, the FWF review

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Well, I've picked up another book from the library. This time it's "The Automatic Millionaire" by David Bach. I've read some other books by him, most notably "Smart Couples Finish Rich".

Chapter 1, in which we meet our prototypical automatic millionaire.

The young author meets a millionaire next door type who give the secrets of their $2 million net worth in their early 50's on a combined salary maxing out at $55k. All personal finance books seem to start with an example story that lays out the basic points that form later chapters and serves as motivation, there's nothing new here. It's a good example of laying out what you're going to be talking about later. The idea of this book is to simplify saving for retirement, automating as much as possible so you don't have to think about it. Inevitably, this is going to lead to a less than FWF optimal strategy.

Chapter 2, "The Latte Factor"

The basic idea here is that small unnecessary expenses add up. Start the process by keeping track of what you spend (including credit purchases) for one day (or even better, one week), and then sort the list into essential and non-essential. The goal is to identify where you can cut back. Replace the morning Starbucks with the office coffee pot, etc. "The Latte Factor" shows up in all Bach's books, I wouldn't be surprised if he's trademarked the phrase, and here he also calls it the Cigarette Factor (those little nicotine delivery devices are expensive). You want to identify places you can cut back or substitute to find the money to save, this is to fight the "I spend my whole paycheck" argument against saving.

The potential weakness here is because you are self rating what's essential, you might mark that latte or those smokes as "essential" in a fit of self justification. Perhaps someone else could mark your essentials list. With long discussions on FWF about packing lunches and living economically, there are no great FWF sins here in this chapter.

Chapter 3. Pay Yourself First

First off don't keep a budget, it doesn't work, it's not realistic as it fights human nature. Paying yourself first actually reduces the need for discipline in spending because you set aside untouchable money. With the rest of the money you make, do what you want.

You want to know who "Pays themselves first"? The government, that's who. Your taxes are automatically deducted, your savings should be too. So how much to pay yourself? Bach provides these estimates, 5-10% of your gross income and you'll have a middle class retirement, 10-15% nets you upper middle, 15-20% and you'll retire rich, 20+ and you'll retire not only rich but early. These numbers seems to be clearly aimed towards people who have middle class to begin with, which, given this is a financial self help book, is reasonable.

Chapter 4, Automate, Automate, Automate

The key here is you want to remove the need for discipline. Set things up so they happen automatically, and then you can forget about them. Since they're forgotten about, there is no need for discipline in saving. If you can't bear to start with even 10% of gross savings, start anywhere, even 1%, but make sure you save percentages, not absolute amounts, that way your savings grow as your earnings do, automatically. Once you're comfortable with what you're saving, increase the percentages until you reach your goal percent.

Bach is a fan of 401k's over Roth, both for the company match, and because it's easy to automate in his opinion and requires less discipline (his concept). He does acknowledge future tax uncertainty and tax rate hedging. We also get some charts on the wonders of compound interest. It's not he FWF optimal strategy of maxing out company contributions in 401k, then funding Roth, then maxing the 401k.

So what to invest in? Bach provides some charts and espouses diversification. He says treat stock in the company you work for as if it is aggressive growth whether or not the company would fall into that area. That way you minimize having all your eggs in one basket if something happens to the company. Want to make things even simpler? Go for target date funds. If you have more questions about retirement planning, he refers people to try IRS pub 590 (IRA's/401k) or pub 560 (small business owners)

Automate bill paying as well. This removes the desire to spend the money on something else. Automation/simplification is the overriding theme of the book.

Chapter 5, Automate your Emergency Fund

According to Bach, you want at least 3 months of emergency cash, more if you feel that's not enough, maybe you're afraid of UFO's like one example couple. Bach states a good place to stash that cash is in MMA accounts, and make sure you shop around for rates. Don't try to build up the fund as quickly as possible, try to automate deposits into your emergency fund of 5% of gross until you reach your emergency goal. Since buildng up he emergency fund is one of the first steps to
take, he wants it to be psychologically doable, thus the 5% until full funded target. Bach has never been one to encourage a ramen noodle diet in pursuit of financial wealth.

But what if you have credit card debt? Then go for one month of emergency funds and focus the rest on paying down your cc debt. CC debt gets it's own chapter later.

Chapter 6. Automatic Debt Free Home Ownership

"You can't get rich renting". Home ownership has a number of financial and emotional benefits: it's forced savings (as you pay principal), it uses leverage, it uses Other People's Money (he lists this separately, but I couldn't figure out how this differs from leverage), there are tax breaks to ownership, home ownership is a proven investment, and it provides pride of ownership. Given the current housing situation, this would seem to be bad advice as rent/mortgage payment ratios have gotten out of what across many parts of the country. So for the general population it's good advice over the longer term, for us FWF'ers there are other things to consider, like what you think housing will do.

He does go into how much people can afford, which is where things are out of whack right now in many places, and recommends spending between 29-41% of gross income on mortgage. A faithful reader will catch on to the affordability issue and not focus on owning at all costs, but the emphasis is definitely on owning being preferable.

Bach is a fan of the 30 year fixed mortgage plus making additional payments to shorten the term of the mortgage. He advocates either biweekly, or pay an extra 10%, in order to make an extra mortgage payment a year. He doesn't say why he doesn't advocate just getting a 20 or 15 year mortgage since that would do the same thing. I can only assume it's to give more financial flexibility in case of emergency. This isn't exactly the FWF financially optimum thing to do, since he
does advocate investing in the stock market to gain "typically 10%" returns, he is aware you can do better than investing at the mortgage interest rate.

Chapter 7, Automate a debt free lifestyle

Here's Bach's plan for dealing with cc debt:
1. stop spending so much/don't buy stuff you can't afford (this goes back to his "Latte Factor");
2. negotiate lower rates if possible, and consolidate to simplify repayments;
3. Split your Pay Yourself First money 50/50 towards savings / cc debt elimination. He acknowledges this is not financially optimal, but necessary for psychological reasons, people want to be able to see savings progress, not just debt elimination progress;
4. Pay off cc debt via a "DOLP" method. DOLP stands for Dead on Last Payment, and is a score determined by dividing total amount for the card by the minimum payment. Thus a $500 debt with a $50 min. payment has a DOLP of 10, with a $100 min payment it's DOLP score is 5. You want to identify the card with the lowest DOLP number, and pay minimum towards the rest of the cards while sending anything extra towards the low DOLP number card. Sound anything like the "Debt Snowball"? It should....
5. Automate this process as much as possible, and once paid off, cards should be closed, leaving only one or two cards.

He doesn't seem to advocate going all cash, as there is a sentence or two in there about using cc's only when you can pay it off immediately.

Chapter 8, Make a Difference via Automated Tithing
Here, tithing refers not necessarily to giving 10%, and not necessarily to giving it to your religious institution of choice, but giving to a charity of your choice. This is something Bach has promoted in other books. Sure, it's not financially optimal, after all you are your own best charity, but the psychological/spiritual rewards of giving raise your quality of life, karmic circle and all that. His other books have also talked about spending money on your values to promote personal happiness and quality of life, so he's being consistent.

Overall, a good book for the general population. He doesn't say you're going to get rich quick, in fact he says it'll take years/decades (that alone is pretty much guarantee that he's not a scammer). He's encouraging people to be realistic, and not adopt a ramen noodle diet to achieve goals. He thinks the ramen noodle diet is bound to fail because people in general just can't stick with something so stringent.

Are his ideas FWF mathematically optimal? No they are not. Do they include techniques like AOR? No. Is it a good starting point for beginners? Yes. Something easy enough to implement for a loved one without a current financial plan? Yes (it is focused on automating as much as possible
after all, in order to reduce your need to supervise the money).

I've read several books by Bach, he has an easy to read style that makes his books a quick breeze (I finished the 228 page book in about 3 hours). This is not my favorite book by the author, I prefer "Smart Couples Finish Rich" for it's focus on identifying your personal values and using them to guide your spending to increase your personal well being. I appreciated him asking the question of what to do with your money once you have it.

Copyright Kamalktk, all rights reserved and other legal stuff. I saw my last review posted verbatim on another finance site, with a link to
it's thread. Please let me know via PM if you're going to do that.

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kamalktk said:
Copyright Kamalktk, all rights reserved and other legal stuff. I saw my last review posted verbatim on another finance site, with a link to
it's thread. Please let me know via PM if you're going to do that.


The material you posted isn't yours to copyright. Even if you are paraphrasing David Bach's book, it's still his material. Did you get HIS permission to post copyrighted material?

Sorry, but that copyright statement made me laugh.

TxAggieJen said: Sorry, but that copyright statement made me laugh.

As did your interesting interpretation of copyright law.

TxAggieJen said:

The material you posted isn't yours to copyright. Even if you are paraphrasing David Bach's book, it's still his material. Did you get HIS permission to post copyrighted material?

Sorry, but that copyright statement made me laugh.


I'm no copyright law expert, but it seems to me that you should be able to copyright book reviews. Newspapers have book reviews and movie reviews and those are always copyrighted. So I would think kamalktk would have to right to copyright his review too.

Good review. Thanks. Might have to read this one.

mikef07 said: Good review. Thanks. Might have to read this one.
Read the whole book? Heck I couldn't even make it thru the review. But good job on writing it. I would never read a book like that, Figure I am doing everything wrong now but things are going good, So why fix what isn't broken?

scott1961 said: mikef07 said: Good review. Thanks. Might have to read this one.
Read the whole book? Heck I couldn't even make it thru the review. But good job on writing it. I would never read a book like that, Figure I am doing everything wrong now but things are going good, So why fix what isn't broken?


Improvement. Everyone can always improve. You may get one thing out of this book that helps you down the road. There is always someoen who makes more monye, has more money, and has done more. Nothing wrong with seeing how they did things and either implementing them or throwing them out and saying that is not for me.

mikef07 said: Good review. Thanks. Might have to read this one.
Thanks.

FYI: Bach is a regular contributor to y! finance - link.

I think some people take the "Latte Factor" too far on this forum.

My food bill is roughly $150/month. I suppose I could clip coupons, read all 10 fliers I get a week in the mail, only buy what is on sale and not what I enjoy, etc...but to knock down my bill to $100 it would probably take me 5-10 hours or more of clipping to get that $50.

I think if you want to reach your first million before you are nearly retired, you'd be better off focusing on investing (stocks, real estate, etc), starting your own business, putting in an extra 10 hours at work (to get a promotion, seriously try staying an extra hour at work and see how many people notice) or taking a graduate class to advance in your career.


I'm not focusing on coupon clippers, but just using that as an example.

therivler1 said: FYI: Bach is a regular contributor to y! finance - link.Yes. It appears they've selectively deleted some of Bach's less-impressive writings.

David Bach was touting housing as a no brainer investment as late as summer 2006.

His advice is, at best, horrible.

ScootyPuffSr said: I think some people take the "Latte Factor" too far on this forum.

Right, That reminds me of the phrase, "Penny wise dollar foolish" Don't waste your time on the pennies . Enjoy those lattes along with other things. This reminds you everyday why you are working hard, So that you can enjoy things. Think little and you will have little

scott1961 said: Right, That reminds me of the phrase, "Penny wise dollar foolish" Don't waste your time on the pennies . Enjoy those lattes along with other things. This reminds you everyday why you are working hard, So that you can enjoy things. Think little and you will have littleI agree.
It makes much more sense to just make enough money so that you can buy ten large coffees from Starbucks each day, and not think twice about it.

Problem is, the kind of people who need advice from the likes of Suze Orman and David Bach, probably don't have the marbles to make that kind of money.

Bach is a zillionaire from selling books. I tend to think you can learn more here on fatwallet reading the finance and hot deals than any book.


Rob

ifyouhavetoask said:
It makes much more sense to just make enough money so that you can buy ten large coffees from Starbucks each day, and not think twice about it.

Problem is, the kind of people who need advice from the likes of Suze Orman and David Bach, probably don't have the marbles to make that kind of money.


Or maybe they just value different things than you do - maybe they would rather spend time with their family or on hobby than spend extra hours working. Maybe they have a job that they really enjoy, but doesn't pay well.

I do think the latte factor gets overused, but I also think there is some wisdom in it. If that latte is the only thing that gets you out of bed in the morning, than go for it. But for a lot of people there are things that they can cut back on to save some money with a minimal impact on their lives.

Here's my advice on how to become what Bach wants you to become:

1. Quit your job
2. Stop spending money
3. Become a SELLER, not a BUYER
4. Buy Low, Sell HIGH and keep on selling.
5. Stop listening to other people's lame advice on how to become wealthy
6. If you have to buy a book to learn how to make money, save money, you're never going to make it.
7. If you see a bunch of people doing something (like stashing cash in a 401k), do the OPPOSITE. It's usually a bad sign when "everyone" is doing the same thing. It means that sheep will be slaughtered.
8. Diversify your funds into things you understand. No point investing in something you don't understand or working on something you only partially understand.
9. If you "think" housing is hot, then don't buy it. GO build houses and sell them to the idiot that wants to buy them.
10. Stop wasting your time in these colleges. Get a brain. Quit giving your (and your parent's) hard earned money away to these stupid institutions that brainwash you into being a better "consumer/employee". Be a visionary and quit following the herd to the slaughter.

MadAnthony said: Or maybe they just value different things than you do - maybe they would rather spend time with their family or on hobby than spend extra hours working. Maybe they have a job that they really enjoy, but doesn't pay well.

I do think the latte factor gets overused, but I also think there is some wisdom in it. If that latte is the only thing that gets you out of bed in the morning, than go for it. But for a lot of people there are things that they can cut back on to save some money with a minimal impact on their lives.
I don't disagree. But the people you describe aren't the target audience for a book called The Automatic Millionaire.

Poor folk are poor because they think poor. To paraphrase Gordon Gekko: Cutting back is for suckers.

This country is so full of opportunity, that you literally have to make a conscious plan to fail.

Want to be rich? Get out of bed every morning at 5am. Make it your goal to earn $100,000 each day. Even if you don't, you'll still accomplish more than if you wake up and set a goal of getting home in time for The Simpsons.

Very nice review. I think that type of book is much needed by some people... not the prototypical FWF regular, not someone who already has six figures in the bank, but the people who just have no idea how to get off the dime with a plan. There are plenty of folks like that around. They don't have any financial background and they have no close role models to learn from.

The "Latte Factor" is probably the most needed guidance these people can benefit from. They just don't have an intuitive sense of how much a couple of bucks a day can mount up over decades of saving. I see these people posting on other boards, typically with topics like "I got $500 extra in overtime this month, what should I buy?" They do not have an understanding of the power of compound interest.

Of course, they have to be motivated enough to read such a book and apply the principles outlined. Some years down the road, yes, they'll be ready for more sophisticated approaches (AOR, etc.). But you have to have a foundational understanding of personal finance in order to understand how to exploit more attractive opportunities.

It sounds exactly like the kind of book I'd recommend to some of the employees we hire right out of college. It's sad to see some of the mishaps they bring on themselves out of ignorance.

therivler1 said: FYI: Bach is a regular contributor to y! finance - link.

I wouldnt take that as an endorsement....

Nice Review. I'll check out the book..

I read the book, but overall, I wasn't impressed with it.

Really, why do you buy that Starbucks drink? Not because you want to spend an extra $2.50 for it, but for the much much better flavor and smell that it has compared to the crappy office drip coffee that's probably too water down and bland.

Plus, do you really want to spend your weekends clipping coupons saving that extra $50 which really took you 4 hours to find and clip out? Pretty much, you're selling yourself out for $12.50 an hour.

My opinion, drink that great tasting Starbucks latte like it was your last drink, but drink it while investing in yourself for 15 minutes everyday... such as reading a computer skill book (Ajax, Ruby on Rails, DOM Scripting, Java, etc) or a business/financial book. Along with that, instead of spending hours cutting up coupons like many folks waste their lives on, take that time to further develop your career skills, heck, you will probably knock out 2-3 books a month like that.


Take two folks with the same factors in life, but have one take path of drinking crap coffee and coupon cutting and the other sipping his Starbucks latte and reading his computer/finance books, I will almost guarantee that the second guy/gal will have a much better financial situation then the first guy long-term wise. (of course, the first guy could also read some books, but most likely, he won't, too busy with the saving his few cents where ever he can)


Shoooot.. the second guy might even read the book "4 Hour Work Week" as well and learn to outsource all the coupon cutting to his resources in India or China and sell that service to the first guy. Of course, the second guy will be sipping on his latte, heck... his mojito in his underwear...

Doing something else that is productive while drinking overpriced coffee doesn't have any bearing on the argument that drinking overpriced coffeee does make sense financially. There's no reason you couldn't read the same books while drinking generic coffee.

If you smoke while working out and manage to live longer than someone that sits around reading online forums all day not smoking, that doesn't make smoking any better of a decision healthwise (yes, it's intended to be ridiculous).

It's a basic argument of substituting generic goods for brand name luxury goods. Making smart financial decisions on what coffee to drink is very easy (drink the cheaper one). Perferences are a B*** though.

You can't write books that tell people how do maximize their utility - cost, as utility is completely unknown. I guess you could. It would have one line to help you make decisions: If utility - cost >= 0, go ahead. Of course, that ignores the opportunity cost of other actions that might have better utility to cost ratios...

ifyouhavetoask said: MadAnthony said: Or maybe they just value different things than you do - maybe they would rather spend time with their family or on hobby than spend extra hours working. Maybe they have a job that they really enjoy, but doesn't pay well.

I do think the latte factor gets overused, but I also think there is some wisdom in it. If that latte is the only thing that gets you out of bed in the morning, than go for it. But for a lot of people there are things that they can cut back on to save some money with a minimal impact on their lives.
I don't disagree. But the people you describe aren't the target audience for a book called The Automatic Millionaire.

Poor folk are poor because they think poor. To paraphrase Gordon Gekko: Cutting back is for suckers.

This country is so full of opportunity, that you literally have to make a conscious plan to fail.

Want to be rich? Get out of bed every morning at 5am. Make it your goal to earn $100,000 each day. Even if you don't, you'll still accomplish more than if you wake up and set a goal of getting home in time for The Simpsons.
D'oh!

kranky said: Very nice review. I think that type of book is much needed by some people... not the prototypical FWF regular, not someone who already has six figures in the bank, but the people who just have no idea how to get off the dime with a plan.
And I doubt this book will help those people. The guy got rich selling books to people who don't have a clue and think reading a book will make them rich. They would be better spending the money on a few Espresso's than buying the book. So much in life comes down to simple common sense and you wont get that from a book, If anything reading those books causes you to lose it

Thanks OP -- Great book review.

One thing I think many personal finance books have in common - the need for discipline, as in self-discipline.
The teenager who rejects cigarettes, the 20 something who eschews lattes on the way to work, are showing self discipline and are likely already on their way success in other areas of their lives, too.

On the other hand, the 14-year old who gives into his friend's pressure to smoke, the college student who just "has to" buy a latte to wake up for class ... well ... chances are they will lead lives filled with many cigarettes and lattes but rather empty otherwise.

--Kanosh

Kanosh said: Thanks OP -- Great book review.

One thing I think many personal finance books have in common - the need for discipline, as in self-discipline.
The teenager who rejects cigarettes, the 20 something who eschews lattes on the way to work, are showing self discipline and are likely already on their way success in other areas of their lives, too.

funny cause I smoke and drink about 10 shots of espresso a day. I have something that works better than self-discipline, Extreme Compulsiveness. I can't change so I turned it to my advantage. My main compulsion now is to increase my worth every month. Would like to quit the cigarettes though

Kanosh said: Thanks OP -- Great book review.

One thing I think many personal finance books have in common - the need for discipline, as in self-discipline.
The teenager who rejects cigarettes, the 20 something who eschews lattes on the way to work, are showing self discipline and are likely already on their way success in other areas of their lives, too.

On the other hand, the 14-year old who gives into his friend's pressure to smoke, the college student who just "has to" buy a latte to wake up for class ... well ... chances are they will lead lives filled with many cigarettes and lattes but rather empty otherwise.

--Kanosh


I don't think smoking and wealth and/or lattes and wealth are mutually exclusive. The key is finding things that bring you happiness and eliminating the rest. Some people on this board are cheap bastards who drive beaters and shop Goodwill (self included), but enjoy splurging on expensive wines, art, or jewelry. To each his own... money's great but what's the point of having it if you don't get any enjoyment from it?

robertw477 said: Bach is a zillionaire from selling books. I tend to think you can learn more here on fatwallet reading the finance and hot deals than any book.
Rob

In chapter one, Bach stated that when he met our prototypical automatic millionaire, he was already teaching personal finance courses and was in his mid 20's. He stated that he was making in the six figures and spending it all, and meeting the prototype changed his thinking and made him think about following the advice he was teaching. Whether this is true or not I don't know, it could be made up to make the reader feel better about there own situation.

I have a generally good opinion of Mr. Bach's books. I don't read his yahoo column. I get the impression he is honestly trying to improve people's lives via these books. He has consistently talked about spending money on your values in order to increase your happiness, with the money being spent in this way having outsize returns on personal happiness. He also consistently talks about wealth building as a long slow process. These concepts don't strike me as one's that would come from a desire to just sell books.

kamalktk said: Well, I've picked up another book from the library.

Without knowing anything else, that statement tells me:
a) kamalktk will likely retire rich without a problem
b) doesn't need this book (except to use it for his hobby of writing reviews )

If Bach was more honest, the book would have one page that said:
"Write a book that people think will make them a millionaire if they read it."

vstrt said: 4. Buy Low, Sell HIGH and keep on selling.With such a revolutionary advice, it is shocking that tens of thousands of adoring fans are not following you around praying and hoping for yet another utterance. I especially like how practical and easy to follow this advice is, which practically is no doubt highlighted by your use of caps.

7. If you see a bunch of people doing something (like stashing cash in a 401k), do the OPPOSITE. It's usually a bad sign when "everyone" is doing the same thing. It means that sheep will be slaughtered.Wow, your post here really is quite something. We tend to call people "sheep" when they follow something or someone without understanding the reasons for the actions. As such, being contrarian for the sake of being contrarian is just as idiotic and sheep-like as following the majority without understanding the rationale for their actions. Consequently, announcing that 401(k) contributions are foolish simply because plenty of people are doing it is about as laughable as it gets.

10. Stop wasting your time in these colleges. Get a brain. Quit giving your (and your parent's) hard earned money away to these stupid institutions that brainwash you into being a better "consumer/employee". Be a visionary and quit following the herd to the slaughter.My apologies for jumping to conclusions here but based on the portion of the quote above, is it fair to assume that you are a high school dropout and that you recommend that other people follow in your footsteps?

scott1961 said: My main compulsion now is to increase my worth every month.

Same here. It kind of drives me crazy sometimes...

I do feel that some of Mr. Bach's teaching is good, such as the automatic investing by paying yourself first. However, I am re-evaluating this strategy now as I do not trust government in the long run, as the tax deferred benefit could end up with the same fate as social security TAXation. When 401K is taxed at personal income tax rate, you just don't know whether the rate will be increased or not should the government decides that they need more money to run the show.

His book is good for general public and for people whom are re-evaluating their strategy from time to time. You do not need to follow what he says as long as you have developed your own strategy.

Thanks for the review kamalktk.

From a FWF perspective, it sounds like Bach only goes against the conventional wisdom:

1) No particular espousing of a Roth for retirement savings
2) Encouraging debt snowballing instead of paying highest-rate-first

And neither of these are particularly harmful, just sub-optimal.

ifyouhavetoask said: .....than if you wake up and set a goal of getting home in time for The Simpsons.


Whoa, slow down, no need to bash the Simpsons. Sure the quality has slid a little over the last decade, but they are still funny.

Of course those with sound financial goals in place can afford a digital video recorder and can record all 20+ episodes of the Simpsons that air each week (although finding the time to watch them could definitely interfere with time better spent planning financial goals).

ifyouhavetoask said: Want to be rich? Get out of bed every morning at 5am. Make it your goal to earn $100,000 each day. Even if you don't, you'll still accomplish more than if you wake up and set a goal of getting home in time for The Simpsons.

So your a salesperson, okay we get it!

While you were "quoting" Gekko, I was really waiting for you to spit out something from Zig Zigler and/or any other Amway clown.

Oh and for all those saying the clipping coupons takes hours upon hours, you really have no idea what you are doing and/or talking about. You presumably read the Sunday paper, if while you are reading it you notice a coupon for something you usually consume you "clip it". It might add 10 to 15 minutes to your Sunday morning reading(s). I save ~$60 a month via "clipping" coupons and I spend no more than a half an hour a month looking for them.

You can easily skip this book if you have:

1) financial common-sense
2) high school education or equivalent

I read the book and found it mind-numbing. Its the beginner book to end all beginner books. I gave my copy to a teenager because thats really the type of person who would benefit from a book like this. If you have read FWF for a while, save your money.

disclaimer: after learning about compound interest during the first 100 pages of the book, I skimmed (read: skipped) the rest.

7. If you see a bunch of people doing something (like stashing cash in a 401k), do the OPPOSITE. It's usually a bad sign when "everyone" is doing the same thing. It means that sheep will be slaughtered.

Bad news, everyone here is breathing. Guess it's time to stop.

Want to be rich? Get out of bed every morning at 5am. Make it your goal to earn $100,000 each day. Even if you don't, you'll still accomplish more than if you wake up and set a goal of getting home in time for The Simpsons.

Bunch of people did that. They're called mortgage brokers, and made lots of money by bullshitting their (often complicit) customers, and bullshitting their (sometimes complicit) lenders. It's not turning out so well. Sometimes short-term thinking and blinkered focus on the benjamins doesn't quite work.

erinm said:
I don't think smoking and wealth and/or lattes and wealth are mutually exclusive. The key is finding things that bring you happiness and eliminating the rest.


On one had I agree, but the problem (and the point of several of these posts) is that the small things add up. If you want to spend $50 on coffee per month, and I spend $50 on having cable...that's each of our prerogatives. The trouble comes though in the mentality that small things don't matter.

Every now and then I'll look at my credit card statement...at the string of $5-$10 charges...and think those numbers couldn't possibly add up to THAT total! But, alas, they do. Small things here and there...a couple bucks a day...add up to big money by the end of the year.

There's no need to be penny wise and dollar foolish....can't we be penny wise and dollar wise?

Thanks! reserved one copy from the library

mikef07 said: Good review. Thanks. Might have to read this one.

The review's perfect. I don't have to read this book now. This guy had me interested in what he was saying after he showed up on CNBC's "Get Rich" etc. series...

Thanks kamalktk.

Skipping 46 Messages...
BigFatCat said: JudFry said: I should make between $1,000,000 - $4,000,000 for this years $16,000 contribution to my 401k. I'm assuming 1st in last out and 8-12% ROI. That is only for one year of contributions. I have a couple more in and many more to go.

401 Caculator


Ummm... nice try... the calculator assumes that you make the contribution EVERY year... not just once.


JudFry, sorry for the bad news, but BigFatCat is correct.

Also, the contribution limit this year is $15,500 if you are under age 50.



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