Since we are in the mindset of becoming rich and using automation to do it, here is another great book that can help you move towards your financial independence. It is The Automatic Millionaire by David Bach. Mr. Bach really focuses on how you need to come up with a plan and then automate that plan as much as possible. The book was an excellent read and very easy to understand. It provides TheAutomatic Millionaire Blueprintto make this as easy as possible. The blueprint is broken down into 7 simple steps.
STEP 1: Retirement Plan
Automatically pay yourself first!!! We have talked about this quite a bit. Refer back to Pay Yourself First post a few months back. In Step 1, Mr. Bach is saying to automatically invest a percentage of your paycheck into your 401(k) Plan, IRA, or similar pretax account. If you are investing into a 401(k), at least invest the minimum amount your employer is willing to match.
STEP 2: Checking Account
Deposit your paycheck automatically. Most employers will allow you to set up Direct Deposit so your paycheck is automatically deposited into your checking account. The days of having to go to the bank to cash your check are pretty much over. Don’t get me wrong, there are still a few people who have to go to the banks to cash their checks, but few compared to the masses.
STEP 3: Emergency Fund
Fund your Emergency Fund automatically. Use automatic transfers to send a percentage of your paycheck over to your Emergency Fund. You remember the Emergency Fund right? We talked about that about three months ago regarding our Savings Bucket. Check out that post here. Mr. Bach recommends that your Emergency Fund should be put into an online savings account. There are great online savings accounts out there that can give you an interest rate of 2% or more. Check out Marcus.com.
STEP 4: Dream Account
Automatically fund your Dream Account. We haven’t talked about this yet. A Dream Account is an account where you put a little bit of money away each paycheck which is used to fulfill a dream of yours. It could be buying your first brand new car, taking an exotic vacation, or finally putting in that swimming pool you’ve always wanted. Mr. Bach recommends this money be put into a Money Market or in CD’s.
STEP 5: Credit Cards
At a very minimum, you should at least pay your credit card minimums each month. It is highly recommended that you pay more than the minimums to knock out any credit card debt as quickly as possible. Those interest rates are a real wealth killer!!! Schedule automatic payments to be paid before the due date to avoid penalties. If you want some great advice on how to knock out credit card debt fast, check out my friends over at LendEDU and their How To Pay Credit Card Debt Off Fast article.
STEP 6: Regular Bills
Pay all of your monthly bills automatically. If you want to avoid any penalties, schedule the bills to be paid before they are due. Be sure to automate payment for your rent, mortgage, car, utilities, phone, and any memberships like to the gym or movies. You may have more monthly bills than this. Just review where your money goes every month and automate the payments!!!
STEP 7: Charity
My mentor Jim Rohn always said, “It is better to give than to receive. Because giving starts the receiving process.” I am a firm believer in what you send out comes back to you. Whether that be deeds or money, it will come back. Automate a donation to your church or favorite charity every month. Our church allows for automatic tything, through FaithDirect.net. Automate your donations and do your part to help out your fellow man.
The Automatic Millionaire is a great book that breaks these steps down so that anyone can understand them and work their way towards financial independence. The book is easy to read and really kept my attention. The Automatic Millionaire Blueprint gives you all the steps you need to be successful. Are you doing any of these steps today? Are there some on here you left out? No worries, use the blueprint to make sure you have all your bases covered!!!
If you want to read this great book, you can pick it up on Amazon via my affiliate link below: