2million - My Journey to Financial Freedom

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Friday, February 17, 2006

Book Review: The Automatic Millionaire Homeowner

Since I am actively searching for a home at the moment I was eager to jump into this book. I had never read the bestseller "The Automatic Millionaire" by the same author, but I am famaliar with the principals and was eager to see what insight the author had for the real estate world.

I read this book in a single evening. After reading the entire book I finished disappointed. Since I am activing looking for my next home I had hoped this book would serve as my inspiration for pressing ahead and making a commitment. Needless to say I don't think it came close.

This book is written for an audience who has never bought a home. It offers muted inspiration for getting out of the renting lifestyle and offers little real insight for anyone who has any common sense when it comes to real estate.

I do take contention with a portion of the book the author used as a guide to how much one could afford. The author used some common rules of thumb provided by the FHA that a family could spend 29% of their gross income on housing costs and up to 41% of their gross income for all debts (so if you had no debts you could spend 41% of your gross income on housing costs) and discussed them as a "floor" and "ceiling" when it comes to the affordability of homeownership. I am shocked that the author would suggest such an idea as I wouldn't consider it a wise suggestion at least in the area that I live in (I suspect it may make more sense in CA and NY where the author has lived).

Who Should Read This?
Renters who want to know about how home ownership can help them create wealth; book is more applicable to high value real estate areas such as CA and NY.

Who Shouldn't Bother Reading It?
If you are a homeowner and have a basic understanding of real estate topics, this isn't worth your time.

Inpiration:
For the Financially Savvy:
Expert Insight:
Real Life Experiences:

posted by 2million at 2/17/2006 12:10:00 AM

7 Comments:

  • Bummer. I was hoping this book might be more worthwhile than it seems. I might have to just "read it" in the bookstore. I was a big fan of his original A. Millionaire.

    I suppose I do qualify under your "who should read this" claim so there is hope. :-)

    By Blogger Splat, at 8:16 PM  

  • This is basically what I expected to hear about this book. I really like David Bach, but I kind of felt the same way about Automatic Millionaire. It was a good book and I did like it, but it seems a little simplistic to me. I was already doing pretty much all of the things from that book, even though I never had really thought about my finances before reading that book. My guess would be that most of these books are for people just starting out or people that are bad with their finances and want to change.

    By Blogger RS, at 9:58 PM  

  • I had kind of figured this was one Bach book I wouldn't be getting, though I enjoyed his others.

    By Blogger SMB, at 7:52 AM  

  • Definitely don't buy the Automatic Millionare. My wife and I recieved a copy in Catholic Pre-Wedding councling. Where are the books to take you from where you are to a SEC qualified investor?

    Check out The Four Pillars of Investing by William Bernstein. One of the better books on the dangerous of active fund managment.

    By Blogger Rob Deichert Jr, at 8:39 AM  

  • sadly, a lot of people are getting on the bandwagon of writing pf or re books just coz its a hot topic.

    thanks for the heads up.

    check out my review of "the millionaire maker"
    http://moneyshaker.blogspot.com/2006/02/millionaire-maker.html

    By Blogger Adventures In Money Making, at 9:30 PM  

  • Yeah this book seems like a bunch of rehashed, uninteresting simple advice and tips. Not really worth the read unless you are just starting to think about your financial situation. If you have time take a look at my Auto & Car Loan site. It isn't directly related but might be worth a read.

    By Anonymous Anonymous, at 4:05 PM  

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    By Anonymous it's good to see this information in your post, i was looking the same but there was not any proper resource, thanx now i have the link which i was looking for my research., at 8:17 AM  

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