The Automatic Millionaire by David Bach

David Bach, has written "The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich" in an easy to understand manner. He has made the complex world of money very simple. The essence is to teach his readers how to make a simple financial plan, and automate our earnings into the various components of the plans monthly, that is, pay ourselves first.

Since the money is no longer available to us (as it is deducted from the salaries automatically each month) we shall have no way of spending it! Consequently we shall have substantial savings at the end of each month. These savings are invested to build a golden nest egg for our retirement.

Readers also get a feeling that they don't need to make tonnes of money to retire rich. All they need to do is to start at an early age, create a financial plan, make their financial plan automatic, stop small spendings on seemingly inexpensive things which cumulatively eat away savings (the latte factor) and stay on track.

Becoming an automatic millionaire is based on the principle of setting aside some money every month using automatic deductions from salaries for our entire working lives and using the power of compounding to create a dramatic nest egg. The author covers various aspects of our finances.

He takes readers through a journey that encompasses savings, investing in 401(k) plans, IRAs and mutual funds, creating an emergency fund for rainy days, debt-free home ownership, paying off credit cards to pave the way for a debt- free lifestyle and tithing. In each of these areas he shows us how to create a simple plan, provides lists of resources which can be used for investing or purchases and then advises us to automate the funding every month from our salaries. He also explains the caveats or various financial follies.

In a nutshell, this is a very good book for starters to learn about wealth creation and management of personal finances in a very simple and doable manner.

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