If you've read Free Money Finance for any time at all, you know how I love the book The Automatic Millionaire by David Bach. It's one of my top-three personal finance books ever because it's both practical and powerful. I recommend it to everyone. So when David's book company contacted me and asked me to review a copy of his latest book, The Automatic Millionaire Homeowner, I accepted without hesitation.
The book's purpose is simple and stated succinctly in the first few pages:
My mission with this book is to help you use homeownership to build real wealth for life -- automatically.
Then adds this promise a bit more in:
This is a book about how to make solid decisions in real estate that will make you rich over a lifetime.
And the back cover expands a bit on Bach's outlook:
Renters stay poor, homeowners get rich, and smart landlords laugh all the way to the bank.
In short, the book serves a few purposes:
1. For someone who doesn't own real estate, it tells them why it's a good idea to own it and how to go about doing so.
2. For someone who "owns" a house but still has a mortgage, it gives advice on how to manage/maximize your real estate investment (though much of this is implied).
3. For someone who wants to make money in real estate, it offers guidance on how to do this.
The book is full of practical lists as well and includes the following that I found useful/interesting:
- Six steps to getting a downpayment
- 12 Steps to pick a home
- Eight important things a great real estate agent can do for you
- Three rules for hiring a great real estate agent
- Five simple ways to protect yourself from a real estate meltdown
Overall, I found it to be a great primer on real estate. It's perfect for someone buying a house for the first time or for a homeowner who is wondering how his home fits into his overall investment portfolio. For potential real estate investors it's "ok", though probably not as detailed as many would like.
I found Bach's advice to be mostly right on (in the sense that it agrees with mine). ;-) He takes a bit more liberal view of items like 0% interest loans than I would, but in general he and I have similar thoughts on the basics of real estate. (see this link for My Formula for Buying a House).
If there's anywhere we disagree it is in the investment section of the book. I agree that real estate can be (and often is) a good investment, but it also requires a lot work for the return. Bach mentions the fact that it's not easy -- but it's on one page or so out of 250 and really gets lost. In addition, he implies that everyone who invests in realestate will get rich. I think that's overly optimistic.
That said, I liked the book and the Free Money Finance Rating for The Automatic Millionaire Homeowner on my 0 thru 10 rating system: 7 Stars.
I'll be posting more on this book in the next few weeks, but I can't end this review without mentioning Bach's continued emphasis on giving. He has a section titled "Happiness Begins with Giving" and has committed to donating $50,000 to Habitat for Humanity as well as giving a portion of this book's royalties to the organization. When I look at David Bach's success, I can attribute much of it to his willingness to sacrifice to help others and encourage his readers to do the same. I admire and commend him for this.
Free Money Finance books that earn 8 stars or more (not all money related):
I enjoyed Bach's "The Automatic Millionaire" and I look forward to reading this one too just as soon as my library gets it, or I otherwise get my hands on a copy. Wink, Wink. Nudge, nudge.
Seriously though, from what I recall of "The Automatic Millionaire" Bach's set it and forget it approach to paying yourself first is just the kind of advice that can help people who are intimidated by financial planning or who are otherwise disinclined to spend the time needed to manage their money on a regular basis. I'm interested to see whether Bach does as well with this topic or whether he's just pushing real estate because it's been the big thing in investments for the past couple of years.
Posted by: John OMM | March 06, 2006 at 10:24 AM
I just customized my home page about a week ago and I have been on free money finance at least once a day. I have heard of David Bach and am on my way to the library right now for "Automatic Millionaire" (Maybe Amazon or Barnes n Noble), but I sure would be shocked if I was just finishing his first and all of a sudden WAM!!! WhOOSH!!! KAPLOW!! There is my winning name bold faced in green. I may just become the avid reader I use to be. Thank You free reader, some people need free advice and we appreciate it!!
Posted by: Rick Irwin | March 08, 2006 at 12:40 PM