David Bach is the king of financial planners. Thousands of certified financial advisors and planners look to him as the standard for how they should advise their clients. One day I was in Barnes & Noble, and I was under a spirit of responsibility to manage my money well, to make it grow, for me and my family’s future. Approaching the age of 30, and not having saved nor invested successfully, I understood that I needed to change some of my ideas and habits drastically. But I did not know what to do. As Rebekah was with Mary in the kids’ section, I wandered over to the business books, hoping to find something useful on personal finance. I saw a strong-looking, clean cut black guy in his 40s who was looking at the shelf of books. He looked like he’d done this before. I struck up a conversation with him, about how I was trying to study up on how to save and invest for my family’s future, but I was overwhelmed at all the different books, and I had no idea where to start. He pulled out David Bach’s The Automatic Millionaire:–he said the book is very easy to understand and has powerful principles on growing your money over the course of your life; and also, by the time you are 60 or so, the plan is to attain a total of about $1 million for retirement! He had been applying its principles for years himself; and it enabled him to amass lots of money.
This is exactly what I was hoping for. When he asked me what my personal goal was, I actually told him it was in fact $1 million! It just so happened he pulled out a book that said how to do it! He got nervous and actually dropped the book, because it was kind of a weird moment! What’s more, the guy’s name was David (same as the author of the book); and he gave me his personal contact card, if I had any questions—revealing that he was a Major in the United States Air Force, and was a member of The Joint Chiefs of Staff. So, I knew he was reliable. He told me he has been reading books on money, saving, investing, and personal finance for about 10 years, but that David Bach’s The Automatic Millionaire is clearly the best, the simplest, the most powerful, and the most useful. He also wanted to show me The Millionaire Next Door by Thomas Stanley and William Danko, but it was not on the shelf. He said that would be another good book to study as a supplement.
Coming out of my study of P. T. Bauer’s Dissent on Development, I understood that working, saving, and investing is basically the “formula for financial growth” he puts forward to alleviate poverty. I knew I had to do this, but I also knew there had to be a wisdom and logic behind it that I didn’t have. I had been living paycheck-to-paycheck for years, and tried to pull out money for savings every once in a while, only to find myself reaching back into my savings account, and watch it dwindle down to zero: something had to change! I knew I had to stop this “set aside an occasional chunk of change into my savings account” practice—it just wasn’t good enough. And after reading Bauer and Proverbs 10-31, I knew one thing I lacked: sound advice from an authority on financial planning, which would result in financial wisdom, and more financial security for me and my family’s future.
MILLIONAIRE is not a word that people normally associate with the word CHRISTIAN, unless you are a prosperity gospel heretic; or a business professional that attends an “upper class” denomination: such as in the Catholic, Anglican/Episcopalian, Lutheran, Presbyterian, and United Methodist churches. For years I had a mentality, mainly based on misreadings of the Gospel of Luke, that wealthy people are inherently cursed, unbelieving, and on their way to Hell. This seemed to be the view of St. Francis of Assisi as well. But now, after reading Proverbs 10-31, I see things differently. And since Scripture cannot be broken, I understand Proverbs (which is pro-wealth…conditionally) and Luke (which is apparently anti-wealth) do not contradict one another.
Proverbs gives wise directions to the righteous about how to manage their money, such as saving little by little, giving to the poor, leaving an inheritance, etc. Whereas, Luke warns the wicked against materialism, greed, luxury, pleasure-seeking, and despising the needy. Holding the both in balance, with John Wesley, I can agree that the general tenor of Scripture has this attitude towards money: “Work all you can; save all you can; give all you can.” Money should not just be INPUT (working, saving, and investing)—it should also be OUTPUT (giving, tithing, providing for your kids’ college tuitions, ministry philanthropy, good works, etc).
In this light, the word millionaire doesn’t seem to be that bad of a word, because when you begin to chop up the money, you will find it has many reasonable places that Christ would have you to spend it. I’m not supporting the idea of living a lavish, ritzy, luxury home lifestyle like the prosperity televangelists; nor do I support Christians driving luxury cars; nor do I think very highly of luxury clothes, jewelry, etc, etc, etc. All things “luxury” are unreasonable and go totally against the New Testament—and they break the tenth commandment: “you shall not covet” (1 John 2:16; 1 Timothy 6:9-10; Luke 12:15; Matthew 6:19-21; Exodus 20:17; 1 Peter 3:3). But you will have nothing to spend—righteous or not—if you do not learn how to save money successfully. David Bach’s The Automatic Millionaire teaches us how to do just that.
Naturally, this subject is boring and calculating—but at the same time extremely IMPORTANT—so I bought the Unabridged Audio Book—a total of 5 CDs on Amazon.com to help me read my way through the book, as I listened. And, as usual, I highlighted and marked with a pen all the most important parts. What follows is a chapter-by-chapter summary review of the main ideas he puts forward, so perhaps you can just read this chapter and take action on it right away—instead of reading all the way through his book. Plus, I will give you more of a Biblical take on his ideas. But, of course, I encourage you to study Bach’s book for yourself—and also to get your own certified financial planner after you have studied this. Because this in no way is a replacement for seeing a real, live financial planner in person.
CHAPTER 1. The Introduction rambles a little before it takes off into specific financial advice; and the same is the case with the first 10 pages or so of chapter 1. Then Bach tells the story of his encounter with a couple in their 50s. This happened back when he was in his 20s and just starting out as a financial planner. He himself was having difficulty saving money in his personal life—even though he was “teaching” classes to people on how to successfully save and invest. But his encounter with this couple—the McIntyres—changed everything. They were the first “Automatic Millionaires” he met, as he likes to say. Why this phrase? Because, over the course of their lives, they automated their savings and investments—without having to worry about budgeting, monitoring, or playing around with charts and graphs. There’s a lot that goes into 100% financial automation—in fact, it takes the whole book to explain it—but the first step is to do a payroll deduction into your savings account (p. 26).
After I read this, I took action on it the next day. Rebekah and I went to the bank and got DIRECT DEPOSIT FORMS FOR OUR SAVINGS ACCOUNT—and then we took them to the payroll people for each of our companies (we already had them for our checking accounts…that’s where our normal income was going). But now, each of us signed up for 5% of our paychecks to be deducted into our savings account. Over time, Bach suggests, as your income increases—the percentages of your payroll deductions should increase: 10%, 15%, etc (p. 20). This is already taken care of if you have a 401(k) plan (retirement savings benefit with your company), but they suggest this is really the most effective way to save any money, regardless—in addition to a 401(k). The reason: “Once the decision is out of your hands, there’s no way you can be tempted into doing the wrong thing” (p. 26)—that is, squandering your earnings thoughtlessly. Automatic “direct deposit savings” require no self-control or resisting temptation—the savings are all computerized by your company’s payroll system and the bank. It’s worry-free; and agrees with Proverbs 13:11: “Whoever gathers money little by little makes it grow.” This principle of 5%, 10%, 15% payroll deduction is what they call paying yourself first. That is, before you spend all your hard-earned money on bills and recreation (checking account, 95%), make sure you are setting a little bit aside for yourself (savings account, 5%).
CHAPTER 2. The “rat race” is a phrase that is supposed to create an image of a rat running endlessly on a wheel. It is a cyclical, meaningless process that looks like this: 1. Go to work. 2. Make money. 3. Spend money…repeat for your whole life…and then you die. There is no saving or investing involved (or retiring around 60 or 70). Although the career might be great and the income high, because there is no savings, there is no financial growth, and no progress towards financial independence. In fact, a man who makes $100,000/year can be just as much a slave to this financial cycle as the man who makes $20,000/year. The only thing that makes the difference, the only way to escape from the rat race, and achieve financial independence from this system, is through SAVING MONEY FOR RETIREMENT.
In this chapter Bach talks about another way of accumulating money: what he calls “The Latte Factor.” The idea is to abstain from frequent spending on “small things” like Starbucks coffee, fast food, etc; and instead invest at least $150/month in a retirement account (or $1,800/year). For Bach, the ideal is to be able to reach the point where you are investing $250/month or $3,000/year…resulting in about $1 million by the age of 65:–provided you start investing around the age of 30 or earlier (pp. 48-49). Proverbs 10:4-5: “Lazy hands make a man poor, but diligent hands bring wealth. He who gathers crops in summer is a wise son…” Biblical life application: be a hard worker with a strong work ethic; it will produce wealth; save what money you can now in the summer season of your life (young and middle age: 20s-50s), because when the winter season comes (old age: 60s-80s), your retirement savings will provide you financial security and independence. You are a wise son if you do this. Saving for retirement is wise, but spending your retirement money Biblically is also wise. All things must be spent Biblically, and not selfishly on luxuries and treasures, or God will destroy all that you have attained (see Deuteronomy 8). Gary North, commenting on Proverbs 10:5, says:
The wealth potential of the harvest is enormous…the value of the laborer’s output is high because of the extensive crop. But time is short…there is a huge potential return, but also huge potential waste if the crop is not gathered in due season…The imagery of the harvest points to an all-or-nothing situation. It comes once a year. All the work and capital that has been invested in order to produce a crop is “on the line” during the harvest season…The Bible teaches the doctrine of linear time…The concept of linear time made possible the concept of economic development. Prior to the Protestant Reformation, and especially the seventeenth-century Puritans, neither theologians nor social philosophers, East or West, believed that long-term economic growth is possible…Work requires a sense of timing. There is a time to work hard. There is a time to work at a more leisurely pace. In times of harvest, long, hard work is required. He who ignores this will not have success. Each person needs to pace himself according to the season.
Simply put, during your 20s, 30s, 40s, and 50s—this is the planting and “harvest” season of life (your working years). This is the time of your life that you need to commit to long, hard working, saving, and investing. But in the later season of life: your 60s, 70s, and 80s—this is a time to “work at a more leisurely pace” (your retirement years).
CHAPTER 3. In this chapter we see a progression of the Pay Yourself First idea and the use of payroll deductions by 5%, 10%, and 15% into a retirement account. Here Bach gets a little more specific, even though he is repeating himself: a PRETAX RETIREMENT ACCOUNT is the key to becoming an automatic millionaire (p. 67), provided that it goes through direct deposit savings by percentages, and is never touched over the years. It has little to no effect on our day-to-day livelihood, only subtracting about $10 a day. Bach preaches against budgeting, citing that it not only causes fights among spouses and needless worry (pp. 58-59), by that it creates a false sense of responsibility, and never results in saving real money. Years ago, the US government discovered that people can’t budget, so they decided to automate from people’s paychecks the income taxes that we have today—this started in the 1940s (pp. 65-66). Bach is telling you to do the same thing, only with direct deposit savings into a PRETAX RETIREMENT ACCOUNT. Bach gives a metric for personal savings goals (p. 76). If you want to be:
Middle Class – do 5% to 10% of your gross income.
Upper Middle Class – do 10% to 15%.
Rich – do 15% to 20%.
Rich Enough to Retire Early – at least 20%.
GREED is something that Biblical Christians need to be on guard against. Jesus said, “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal” (Matthew 6:19). When we get into this subject of saving money for retirement or just saving money, we must resist the temptation to be greedy and covetous. Sure, we need financial security for our family. Sure, we have financial responsibilities for their college tuitions, etc, etc. But the question now before us is: WHAT IS GOD’S WILL in regard to your financial lifestyle? The answer is somewhere in the lower middle class or so: “Keep falsehood and lies far from me; give me neither poverty nor riches, but give me only my daily bread. Otherwise, I may have TOO MUCH and disown You and say, ‘Who is the Lord?’ Or I may become poor and steal, and so dishonor the name of my God” (Proverbs 30:8-9). This brings us back to Deuteronomy 8, where faith-based and law-obedient capitalism is the rule. If not, you are destroyed by God as a faithless, rich atheist—and cast into Hell (Luke 16).
Too much riches, the Bible warns, can cloud the soul. If you treasure your salvation, then beware of too much gain, lest, like the rich young ruler, the rich man in Luke 16, or like Ebenezer Scrooge, you become corrupted by your wealth, your faith and spirituality die, and the Holy Spirit in you is totally quenched by ill-gotten gain. Jesus, in speaking of rich apostates, said, “The worries of this life, the deceitfulness of wealth and the desires for other things come in and choke the Word, making it unfruitful” (Mark 4:19). It was once said to me by a prophet, “The day will come when you will have so much money coming in, that you will have to ask God to make it stop!” There IS such a thing as having TOO MUCH MONEY. That comes when clouds of darkness, separation from God’s Spirit, faithless, agnostic skepticism, and atheism start to grab hold of the heart and mind. It causes the man to say, “Who is the Lord?” It causes men to lose their faith, backslide, and not even know God anymore.
Let us be like the wise man who prayed, “Give me neither poverty nor riches” (Proverbs 30:8). Being neither poor, nor rich. Neither on the brink of homelessness, nor rich with countless luxury items, and material treasures. Middle class—perhaps even lower middle class, as a lifestyle, is I think, a much more Biblical, apostolic goal for financial growth. It covers all of your responsibilities as a family man, but also provides a level of security from material temptations for your soul’s sake. There will be those who refuse to allow Scripture to restrain their desire for unlimited gain; and these men often fall into ill-gotten gain, and make God a low priority in their lives (if at all). Jesus said, “How hard it is for the rich to enter the kingdom of God!” (Luke 18:24). Too much riches have a tendency to make men WORLDLY-MINDED and not SPIRITUALITY-MINDED. Just because you CAN become a multi-millionaire, and just because you KNOW some methods on how to—it does not follow that you SHOULD do it, if you are a follower of Christ. Ask God what to do. Consult the Bible: it says “give me neither poverty nor riches.” That’s pretty plain and simple. I believe Jesus and the apostles were part of the lower middle class. According to the Mercer Dictionary of the Bible:
The middle classes of the first century were relatively small but included a broad range of occupations and levels of income. The middle class included merchants, craftsmen (e.g., carpenters, silversmiths, tentmakers), the professions (e.g., lawyers, teachers, physicians), civil servants (e.g., tax collectors), and small entrepreneurs in agricultural industries (e.g., small farmers, shepherds, fisherman).
If we want to be Biblical in our economics and personal finance, then I believe imitating the income levels of Jesus and the apostles is the safest route to take. That means aiming for a middle class lifestyle. Jesus was a carpenter (Mark 6:3), Paul was a tentmaker (Acts 18:3), Luke was a physician (Colossians 4:14), Matthew was a tax collector (Matthew 9:9), and Peter, Andrew, James, and John were all fishermen (Matthew 4:18-19; Luke 5:10). Calculations of money that make an equivalent income to that of Jesus and the apostles—should give us an idea for what our financial goals should look like. I don’t know exactly what Jesus and the apostles’ annual incomes were. They lived in a different time and culture than I do here in the USA. But I can IMITATE them; and that’s what is important. If they were living in America today, and were paid by American standards, their average annual incomes would look about like this:
- Jesus (carpenter): $40,000/year
- Paul (tentmaker): $20,800-$25,000?
- Luke (physician): $187,200/year
- Matthew (tax collector): $50,440/year
- Peter, Andrew, James,
and John (fishermen): $33,430/year
It would be hard to persuasively argue that a doctor is “middle class” and much less “lower middle class.” I think that Luke was the economic exception among early church leaders. The general income level of Jesus and the apostles, seems to have ranged from $25-$50,000/year. Today that includes the lower “working” class and the lower middle class. Avoiding the upper middle class ($100,000/year) and upper class lifestyles ($500,000/year) is Biblically, morally, and spiritually wise. Gary North, commenting on Proverbs 30:7-9, said:
A person had better get rich slowly, because he improves his understanding of moral causation slowly. He develops his moral skills slowly. Theologians call this process progressive sanctification. Wealth accumulated over decades is not the threat to a person that overnight wealth is. Overnight wealth is far easier to achieve than overnight moral maturity.
In the movie The Greatest Story Ever Told (1965), I love how they portray Jesus’ talk with a friend named Lazarus, a rich man. Although there is artistic license with the account, it remains true to Jesus’ teachings in the Gospels on money:
Lazarus: “Tell me, would it be possible for me to go with You?”
Jesus: “You are wealthy.”
Lazarus: “Yes, I am. Is wealth a crime?”
Jesus: “Not at all; but it may become a burden. What does it profit a man to gain the whole world and lose his soul?”
Lazarus: “Are you saying that a man cannot have both money and a soul?”
Jesus: “I am saying that it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of Heaven.”
Sister: “My brother will go to Heaven. He is a good man.”
Jesus: “Did I say he is not good? I said he is wealthy. Where a man’s wealth is, there is his heart also. A man cannot serve two masters; you cannot serve both God and money.”
Lazarus: “But I give my money to God. I give a third of all I earn.”
Jesus: “I know a widow woman who gave two pennies.”
Lazarus: “What is two pennies?”
Jesus: “It was all she had.”
Lazarus: “But I’m not God.”
Jesus: “Would you give up all you own and follow Me?”
Lazarus: “Who could do such a thing?”
CHAPTER 4. This is a key chapter in Bach’s method of how to automatically save and invest for retirement. Amid technical economic charts, graphs, and mathematical calculations, he argues that the fool-proof way to save and invest for retirement is:
- Open up a 401(k) plan (if your company offers one); but if it does not, then open up a “traditional IRA” account (not Roth IRA) with TD Waterhouse or a similar company (p. 102).
- Have at least 10% of your paycheck automatically deducted into either the 401(k) or IRA. If you have to do this gradually to work up your confidence, from 5% to 7%, then so be it. But the ideal is for it to be 10% and keep it that way. If not, you will not really have a comfortable amount of money left when you turn 65 and its time to start drawing off your retirement fund. If your company doesn’t allow you to deduct your paycheck into an IRA, then set up the IRA to deduct 10% automatically from your bank’s checking account (p. 109). This usually amounts to about $100/month (depending on your personal income), and is no threat to your ability to pay bills or your lifestyle. But the key to keeping your system stable is to automate your deductions based on percentages, and not dollar amounts.
- Why the 401(k) or IRA? The answer: (1) It is pretax savings and totally legal. It is a savings account that is not immediately taxed by the government, which means you can make more money from it than a normal bank account. (2) It has compound interest; which means, that over time, the money you put in multiplies dramatically—what Bach calls “the miracle of compound interest” (p. 96). In the parable of the talents, Jesus said, “You should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest!” (Matthew 25:27). Compound interest funds were apparently around in the time of Jesus too. So, 401(k)s and IRAs agree with the wisdom of Matthew 25:27.
- Next Bach advises that your 401(k) or IRA should not just receive money from your 10% paycheck or checking account deduction. In addition to that, you need to set up a deduction system based on an “asset allocation fund” (p. 122). Vanguard is the first company mentioned to handle this, with what are called Vanguard Life Strategy Funds (p. 122). Further, to take the mystique out of wisely and cautiously choosing which mutual funds—he suggests going to com and clicking on “Mutual Funds”; then click “Fund Quickrank”; then screen “U.S. Stock Funds” by “Total return %: 10 Year Annualized.” Bach says, “Just three clicks and—bam! You’ve got a list of the top performing U.S. funds over the last ten years” (p. 129).
In summary, Bach’s most direct advice for building a solid retirement plan is: open up a 401(k) or a traditional IRA with TD Waterhouse (SAVINGS ACCOUNT FOR RETIREMENT); and make sure that 10% your paycheck is being directly deposited into it, automatically. After that, go to Vanguard and get a Vanguard Life Strategy Fund (an asset allocation fund); and use morningstar.com to choose the best of the best mutual funds for your Vanguard fund (INVESTING FOR RETIREMENT); and have any returns on mutual funds automatically deducted into the 401(k) or IRA.
Proverbs 6:6-8: “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”
Proverbs 27:12: “The prudent see danger and take refuge, but the simple keep going and pay the penalty.”
Be like an ant about your retirement years and your future: go to TD Waterhouse: “you can set up an automatic investment program for mutual funds on as little as $100 a month” (p. 102); Vanguard; and morningstar.com:—and start an automatic plan for saving and investing for your retirement today!
CHAPTER 5. Bach stops talking about retirement planning; and steers our attention to the important subject of building an emergency fund. Retirement planning is all about ensuring financial security for you after your working years in THE FUTURE—generally age 65 until your death. But the concept of an emergency fund is about creating a sense of financial security in THE PRESENT. Bach: “People lose their jobs, their health, their spouses. The economy can go sour, the stock market can drop, businesses can go bankrupt. Circumstances change. If there’s anything you can count on, it’s that life is filled with unexpected changes. Stuff happens” (p. 136). Hence the need for building a special savings account just for emergencies such as these—primarily if you lost a job and you needed income to live off of until you found another job. You could refer to it as an “unemployment fund”—to provide a level of security against going BANKRUPT or DEEP IN DEBT (p. 137). Or, perhaps a “medical bill fund,” if you found yourself in the hospital, and your health insurance didn’t cover all of the deductible costs; or an “auto repair fund” for such unpleasant surprises.
Bach says, “I believe you need a cash cushion of at least three months’ worth of expenses. Take what you estimate you spend each month, multiply it by three, and you’ve calculated your goal for emergency savings” (p. 139). So, if you spend $900/month, then you need $2,700 in an emergency fund. If you spend $3,000/month, you need $9,000. Dave Ramsey says the same thing—making 3 months of expenses the minimum—and 6 months of expenses a healthy maximum (The Total Money Makeover, p. 133). “Financial Planners and Financial Counselors like myself have used this rule of thumb for years,” Ramsey says. This is the best way help you and your family be safe and secure in the financial sense.
You should not use this fund for convenience items or fun money. It’s to be stored away, forgotten, and only used if you lost your job, or suffered a medical emergency, or some extreme crisis like that—for the sake of AVOIDING BANKRUPTCY and DEBT. “A real emergency is something that threatens your survival, not just your desire to be comfortable” (p. 140). The best way to keep yourself from the temptation of spending away your emergency fund is not to put it in a savings account in the bank. It’s too easy to get at it that way.
The best way to build an emergency fund is through a website like emigrantdirect.com or something like it (p. 147)—with what is called a “money market account,” which has a high interest rate (Matthew 25:27); which means that it will not only store your savings for emergencies, but actually grow your money faster than a normal savings account in the bank! Bach suggests that you instruct emigrantdirect.com or whoever you choose to take care of your emergency fund—to automatically withdrawal at least 5% of what you make every two weeks on your paycheck. To have them deduct this amount every two weeks automatically from your checking account with the bank (pp. 152-153). Bach also suggests the use of I-Bonds through treasurydirect.gov as a good tool in building an emergency fund (p. 154); and savings bonds on savingsbonds.gov (p. 156).
Two final thoughts on the emergency fund concept:
- What if I’m in debt already? Bach’s answer: “Build up just one month’s worth of expenses in your security account and then concentrate on paying down your debt” (p. 157).
- How much is enough money for an emergency fund? Like we said before, most financial planners suggest to their clients to have a minimum of at least 3 months of expenses to live off of, in case you lost your job. So, whatever your current monthly expenses are, just multiply it by three: and that should be a healthy goal for an emergency fund: 3 months of money as a bare minimum—6 months to even one year as a healthy maximum. But if you start going further than this, it could be a sign of unreasonable worry. One of David’s clients said, “My wife and I worry about the possibility of another depression, or maybe a war. My wife even worries about UFOs” (p. 141). That man had 30 months—or 2 ½ years’ worth of savings for an emergency fund. It was a laughable amount—it made the whole class David was teaching laugh. They had saved this much to alleviate their worries—but even so, it didn’t fully alleviate the worry. There is something mentally unstable about that.
This is why Jesus said, “Do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the pagans run after all these things, and your heavenly Father knows that you need them. But seek first His kingdom and His righteousness, and all these things will be given to you as well. Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own” (Matthew 6:31-34). Is Jesus against you building an emergency fund? No, because that would mean He contradicts Proverbs 27:12: “The prudent see danger and take refuge.” But Jesus wants us to focus most our thoughts on pursuing righteousness and living by FAITH in God and His PROVIDENCE. You might find that building an emergency fund is easier said than done, even if it’s automated. Just remember: if you live by the Bible, your heavenly Father knows that you need money—and this will be given to you as well.
CHAPTER 6. This chapter puts forth the argument that it is cheaper and more profitable to mortgage than it is to rent. Whereas, you will waste your earnings into oblivion by paying rent; with a mortgage, you build equity through your bank’s mortgage program. Bach says, “Many people don’t realize that the same amount of money they spend on rent today could buy them a home tomorrow” (p. 170). The traditional 30-year program is recommended; however, to speed up the process and to gain more money off the mortgage interest in the long term, it is recommended to pay your mortgage off biweekly (every two weeks) rather than monthly. This is only possible through getting an “Equity Accelerator” program with PayMap (about $65 per year), which manages your biweekly mortgage payments with the bank automatically, thus turning it into a 23-year mortgage (depending on the cost of the house)—and if you get a cheaper house, then the years shorten much, much more (p. 182).
What about DEBT!? A valid objection to the mortgage concept. Any reader of Proverbs can see that debt is not advisable; and is not desirable. But the debt of a large medical bill or a car payment, I would argue, as would Bach, is not the same as the mortgage-debt on a house. Why? EQUITY:–a word that implies YOU ARE PAYING YOURSELF WITH YOUR OWN MORTGAGE PAYMENTS (not a landlord). And furthermore, if you sell the house (presuming it is valuable and sellable for the real estate market; most mortgagers do this at least 3-5 times)—the EQUITY TRANSFERS to your new mortgaged house and new bank. Like a college degree, once you build equity, nobody can take it away from you.
What about the DOWN PAYMENT!? Glad you asked. If you’re a first-time homebuyer, you can resort to hud.gov and see if you qualify for financial assistance from the government for a grant (free money from the government) for the very purpose of that hefty down payment. Believe it or not, the government wants you to own your own home as much as you do!
But HOW MUCH HOME CAN YOU AFFORD? If you’re planning on doing a mortgage, make sure not to waste your precious time and money on a mobile home or something like that. If you’re only making around $10 per hour, then you’re not ready to mortgage yet; you should at least wait until you’re making $20 per hour (or $41,600 per year); and can reasonably mortgage out a $150,000+ house, with at least total mortgage payments of $967 per month. The reason: houses less than that generally don’t SELL very well on the real estate market; and most likely, not only are you not going to want to live in a mobile home until you die, but life might take some turns and you’ll be forced to move and sell your house. Having a valuable, beautiful house (yet not a luxury home) is necessary if you are going to bother at all with mortgaging and selling houses over the course of your working life.
And why mortgage a house at all? Two reasons: 1. Rather than losing hundreds of thousands of dollars to landlords, it is wiser to pay yourself in home equity. 2. Private property is not only a Biblical blessing, but is desirable (Exod. 6:8, cf. the Promised Land); “But everyone shall sit under his vine and under his fig tree, and no one shall make them afraid; For the mouth of the Lord of hosts has spoken” (Micah 4:4, NKJV). Adam Clarke says this was a “proverbial expression, indicative of perfect peace, security, and rural comfort;” and of course, of private property: “his vine” and “his fig tree” imply the land they are on are owned by the same man. Who wants to live in a nursing home or an assisted living facility when he is old? Wouldn’t you want the independence, peace, security, and comfort of living in your own home, rather than being monitored by nurses or staff 24/7? But you should always remember to acknowledge the providence of God in such things (Deut. 8), lest you be lifted up with pride over your home, or find yourself comparing your home with those of others (Exod. 20:17).
CHAPTER 7. This is about getting rid of credit card debt and eliminating the cards completely. People who lived during the Great Depression of the 1930s had an intense dislike of being in debt, and they had no credit cards in those days; most of the people in that era only believed mortgaging was a reasonable form of debt (for reasons stated earlier). By overcoming materialism, covetousness, and love of luxury, you too can free yourself from the enslaving culture of debt that exists in America. You too can think as conservatively as the Okies who survived the Depression. INTEREST on credit cards is usually what keeps debtors in such slavery. So, this will be a major thing to tackle first. And if you are in serious debt, it might be good to consult a credit counselor on nfcc.org.
There are five steps that Bach gives to reduce and eventually eliminate credit card debt: 1. Get a scissors and cut up your credit cards. Don’t ever use them again. 2. Call up your credit card company and ask them to lower your interest rate (the “effective rate”), and politely suggest, that if they don’t, then you will go to a company that will. Ask to speak to the supervisor if necessary. And if you have to, put all of your credit card debt balances on to one credit card account, which will make it easier to manage. 3. As you pay off your debts, reduce your automatic payroll deduction and 401(k) to 5%, not 10%. This way, you will put the priority on paying off the debt, without giving into the idea that you can’t save. Yes, you can save and pay off debt at the same time. You should just save substantially less. “The rationale here is as much emotional as it is financial. By doing both of these things at the same time, you will feel your progress. You’ll see money being saved and debt being reduced” (p. 204). 4. Prioritize which accounts need debt reduction the most. Make minimum payments on all your accounts monthly, to remain legal, and to avoid a debt collector. And, like Dave Ramsey says in The Total Money Makeover, use the “snowball method” to focus on paying off the smallest account first; and working your way up to finish off the big one. This will make it easier for you psychologically to persevere through the payments. Zechariah 4:10, NLT: “Do not despise these small beginnings, for the Lord rejoices to see the work begin.” 5. Call your credit card company and ask them to make an automatic deduction from your checking account every month. If they don’t, see if your bank can do it for you.
CHAPTER 8. Without making any reference to the Bible, and trying to apply to all people who go to “churches, temples, or mosques” (p. 214)—even this book preaches tithing; a word that means “tenth” or 10% of your paycheck. Bach says, “Tithing is a spiritual principle common to many traditions that says you should give back a portion of what you receive, that those blessed with abundance have a duty to help others through gifts of kindness, time, ideas, and money” (p. 213). Bach says generosity gives life meaning, not money (p. 212); and that the generous practice of tithing will actually give you the feeling of being rich even though you are not yet very rich at all. “Tithing is not about following tradition or trying to rid yourself of guilt or hoping for some future reward. What it’s really about is giving for the sheer joy of giving” (p. 214). 2 Corinthians 9:7: “Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”
Although we should not give in expectation of receiving a reward from God, it follows that we actually will receive a financial return—regardless. He makes reference to a rags-to-riches billionaire, Sir John Templeton, who was a disciplined Presbyterian tither, even in his poorest days (p. 223). If you like, call it investing in the kingdom of God. And in Bach’s expert experience as a financial advisor, and his conversations with clients, and his personal experience of tithing—he has found that what has been called by Pat Robertson as the “law of reciprocity” really is a financial reality, caused by a mysterious flow of divine providence and blessing.
Bach says, “Although you should give simply for the sake of giving, the reality is that abundance tends to flow back to those who give. The more you give, the more comes back to you. It is the flow of abundance that brings us more joy, more love, more wealth, and more meaning in our lives. Generally speaking, the more you give, the wealthier you feel. And it’s not just a feeling. As strange as it may seem, the truth is that money often flows faster to those who give. Why? Because givers attract abundance into their lives rather than scarcity” (p. 214). Despite the clichés of money-mad televangelists, and prosperity preachers, it remains true what Jesus said, “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you” (Luke 6:38). To make tithing automatic, contact either your church, charity, or bank and try to see if you can get a direct deposit done for tithing. You’ll never have to worry about forgetting to bring your tithing money to church again, and nobody on the pew will know how much you’re putting in the collection plate. Matthew 6:3: “When you give to the needy, do not let your left hand know what your right hand is doing.” If you want to know where your money is going, research the funds of the church or charity, or see if they are at least registered with the IRS, then look them up on justgive.org. Tax deductions are easier to keep track of when you have some kind of tithing report from your church to bring to H&R Block, so try to communicate with them about this too (p. 220). Lastly, once you get further down the road into investing with diversified mutual funds, try using CHARITY FUNDS to be applied to giving to your church; not only will this produce more than just a tithe, it will result in instant tax deduction, without all the rigmarole of tithing reports at H&R Block (p. 221).
 The Automatic Millionaire is put into the personal finance and financial security categories—it is also put into the retirement planning category. Whether or not “retirement” as envisioned by the American Dream is Biblical, I cannot judge for sure in general terms. What do you mean by retirement…personally and specifically? This is the question you have to ask yourself. Do you mean you’re not going to do any working for the last 20-30 years of your life? That’s not Biblical! Adam worked in the garden (Genesis 2:15). Man is created to work and not be idle, lest it turn him into a gossip and busybody (1 Timothy 5:13). But whether you put your savings into the category of “retirement” or not—what’s important is that you are saving money for the future, as the Book of Proverbs wisely advises (13:11; 10:4-5; 13:22). How you spend your time and money after you reach your savings goals is another thing: between you, God, and the Bible. But you will never achieve financial independence, or the ability to choose what to do with your savings, if you never save money at all. Personally, as an old man, I would like to leave an inheritance for my grandkids; have my own property with several acres of land, an RV, and travel all across the USA, preaching the Gospel in the open air on college campuses for hours and hours until I die! But that’s just me. What will you do with your retirement money? Will it be pleasing to Jesus? Ask yourself these questions or proceed no further.
 “The Use of Money” (1760).
 Watson Mills, ed. Mercer Dictionary of the Bible (Macon, GA: Mercer University Press, 1991), p. 228.
 Bls.gov: “Carpenters.”
 Bls.gov: “Physicians and Surgeons.”
 Bls.gov: “Tax Examiners and Collectors”
 Bls.gov: “Fishers and Related Fishing Workers”
 Gary North, ibid., p. 331.
 Matthew 16:26.
 Matthew 19:24.
 Luke 12:34; Matthew 6:24.
 Mark 12:42-44.
 Mark 10:21-22.
 He also lists ING Direct, ShareBuilder, Fidelity, Ameritrade, and Vanguard.
 He also lists Fidelity Investments, Charles Schwab, T. Rowe Price, American Century, and Scudder.
 Other sites he mentions for ranking mutual funds: finance.yahoo.com, mfea.com, smartmoney.com, nyse.com, and nasdaq.com—it might be good to use all of the sites to get multiple testimonies regarding the quality of certain mutual funds and stocks, instead of only relying on the testimony of one website.
 tdwaterhouse.com or tdbank.com
 Bach also mentions ingdirect.com, etrade.com, morganstanley.com, fidelity.com, vanguard.com, and schwab.com.