The Key To Building Wealth

May 6, 2019

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David Bach is one of America’s most prolific and bestselling financial authors of our time who has helped millions around the world learn how to live and finish rich through his books, seminars, television appearances.
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When you start paying yourself first, you’ll find a clear path to financial success.

Believe it or not, getting rich takes more patience than effort.

According to bestselling author David Bach, who is releasing an updated version of his hit book “The Automatic Millionaire” this December, the “most important” first step to take in building wealth is also the easiest: Automate your finances.

The “pay-yourself-first plan,” Bach told Business Insider in a recent Facebook Live interview, is automating your accounts so that a portion of your paycheck moves into your 401(k) plan or savings account before you even see it.

“What most people do when they earn a dollar is pay everyone else first,” Bach, who has spent 25 years in the wealth management industry, explains in his book. “They pay the landlord, the credit card company, the telephone company, the government, and on and on,” and think they’ll have enough money left over to pay themselves after, he writes.

The best strategy for ditching this habit is to automatically pay yourself, in the form of saving for retirement or other important financial goals. “When that money is moved before you can touch it, that’s how real wealth is built,” Bach, who became a millionaire by age 30 by increasing his automated savings over several years, told Business Insider.

And setting up automation takes just a few minutes.

If you set up a 401(k) through your employer, your contribution will typically be automatic, so that’s a great place to start. If you want to save a portion of your after-tax income, you can connect multiple accounts to your direct deposit and designate how much money from every paycheck will move into each account.

After you’ve built up an emergency fund with six months’ worth of expenses, try automating into a high-yield savings account, where you could be earning 1% interest on your money, rather than the 0.01% earned in a traditional savings account. Another great option is to put your savings in a low-cost target date fund, a diversified retirement account that invests your money into a combination of stocks, bonds, and alternative assets.

Bach suggests saving from each paycheck whatever you’re earning in one hour of your work day. If you’re a salaried or non-hourly employee, all it takes is a simple calculation.

“You’d be amazed how effortlessly you can learn to live on a little less,” Bach writes in his book. “You can’t spend what you don’t have in your pocket.”

Additional reporting by Kathleen Elkins.

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Hey there, I’m David.

Thank you. Over the past 30 years, I've had the privilege of reaching over 100 million people through my books, podcast, and media appearances. I've written 12 national bestsellers including The Automatic Millionaire®, Smart Women Finish Rich®, and The Latte Factor—with over 7 million copies sold in more than 20 languages. 

I've been honored to appear on NBC's Today Show over 100 times and have been featured on The Oprah Winfrey Show, CNN, Fox News, CNBC, and more. My work has been profiled in The New York Times, Forbes, TIME, and The Wall Street Journal. 

What has always driven me and still does is this: I want to help you live and finish rich. Whether you're just starting out or looking to make smarter financial choices, I'm here to guide you with real conversations and proven strategies.

At seven, my grandma handed me a stock certificate instead of a Happy Meal. That moment sparked my lifelong mission: to help you take control of your money and build lasting wealth.

Learn More

Bach Wisdom & Sixteen Timeless Truths

These truths have come from over 30 years of learning. Mostly from experience and also mentors. Feel free to pass them along.