When it comes to giving sound answers to personal finance questions posed by the American public, no one does it better than David Bach.
His best-selling “The Automatic Millionaire” was on the New York Times’ best-seller list for an unprecedented 31 weeks for a book on that topic. Over the past decades, he has written nine consecutive New York Times best-sellers that have been translated into 19 languages. He is the only business author to have four books simultaneously on the NYT, Wall Street Journal, BusinessWeek and US Today best-seller lists. His seminars and appearances on top media shows have made him familiar to those who are looking for guidance in their personal finances. More than a hundred million Americans have been exposed to his no-nonsense approach to improving finances.
For simplicity, he boils his advice down into 15 “timeless truths.” To wit:
• Always spend less than you make. Life will be easier and less stressful.
• Automate your financial life, rather than wasting time budgeting. Budgeting causes frustration and failure, he believes. Automation relieves the stress.
• Be an investor rather than a borrower. Investors get rich. Borrowers stay poor.
• Buy a house. Don’t rent. Homeowners and landlords make money and build wealth. Renters stay poor.
• Don’t lend money to family or friends. You’re not a bank and you could lose both the money and the relationship.
• Never invest in things you don’t understand. If a potential investment cannot be explained to you on one piece of paper, it’s too complicated.
• Invest for the long term. Building wealth takes decades, not days.
• Never invest on margin. Leverage kills you when things go wrong.
• Never assume that “things are different this time.” Things work until they don’t work. Never bet the farm. You could lose it.
• Once you become rich, stay rich. It beats starting over again. Talk to those who have been in this position and they’ll attest to that truth.
• Give back. The more you give, the more you will grow, and you make the world a better place. (Bach is known for his charitable contributions.)
• Never give up. No matter how many times you fail, you haven’t lost as long as you get up and try again.
• Compound interest is a miracle that works when you work it. Save $10 per day at 10 percent interest and in 40 years, you’ll have $1,897,233. If the interest is only half that, you’ll still have near a half million dollars, a considerable amount. Your older self will thank you.
A bottom-line quote from Bach crystallizes his philosophy: “When your values are clear, your financial decisions become easy.”