The Automatic Millionaire by David Bach:
My step-dad gave me this book shortly before moving out to Boulder early last year. I had graduated from college shortly before that, so a book on personal finance was a pretty good choice on his part; contrary to what the title may suggest, this is a personal finance book and not a get rich quick book. The "Automatic" in the title pertains to the automating your savings, via direct deposit into a 401k or IRA.
The book can essentially be distilled to the following points:
- Automate your savings, shooting for at least 20% of your paycheck.
- The only loan one should have is a home loan. Buy things like cars, tvs, etc in cash; if you can't afford it don't buy it.
- Aggressively pay off higher interest rate debt, should you happen to have any.
- Purchase a home as soon as possible, and pay half of the payment every 2 weeks, which will lead to essentially an extra month of house payment directly towards the principal of the loan.
- Don't get bit by the "Latte Factor"; that daily latte may only be a couple of bucks, but over the course of a year or more that really adds up.
I don't yet have a house, so I cannot comment on home related points, but the rest of the points I could attest to being rather valuable(got my student loans paid off in 6 months, oh yeah)... all besides the "Latte Factor". I feel like it is analogous to the anecdotal evidence of Diet Coke making people fat; if you feel like you are saving calories there, you will more than likely allocate them elsewhere... that money that you are saving by not buying the latte will most likely just be spent on something else.
All-in-all, I would say it is worth a read, definitely an easy read. David does repeatedly hammer the above points in different ways, so it does feel like the metaphorical dead horse was beaten and kicked, so I wouldn't sweat it if you just want to take my word on the above points or read the cliff notes.
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