From the shelf · 102 money books
Does The Automatic Millionaire hold up?
The Automatic Millionaire (Bach) is one of the 102 money books on The Money Shelf. It comes from the shelf’s earlier bookshop lists and the books that make specific claims. The shelf links it to 4 of the 22 claims that the book tests against official records from the United States, the United Kingdom and Australia. Each verdict below comes from that test.
Claim 1 · The book makes this claimCompound interest: start early
HoldsIn every case above the 40-year saver ends with more than the 30-year saver for the same monthly sum, by a factor that depends only on the return and the number of years, and the first ten years of deposits supply 41 to 54 per cent of the final balance.
Read the full test →Claim 2 · The book makes this claimSmall spending: cut the daily coffee
Weak diagnosisThe arithmetic of small purchases is correct, and a daily 5 is between 2.3 and 5.2 per cent of the average spending in the three sources, while housing and transport take between 31.7 and 50.4 per cent, far larger shares than the coffee in all three sources.
Read the full test →Claim 3 · The book makes this claimPay yourself first: save before you spend
Holds with conditionsThe paper’s own results support pre-committed saving out of future pay rises as a way of raising saving rates among employees who agree to join, and the condition is that the household has income left after essential spending, because the national ratios show only average room.
Read the full test →Claim 16 · The book makes this claimRent or buy: buying a home builds more wealth than renting
Not establishedOwners hold far more wealth than renters in the US, Great Britain and Australia, and a long-run study of 16 economies finds that housing returned about as much as shares with less variation, yet the gap can reflect who becomes an owner as well as what ownership does (inference by this audit).
Read the full test →One book holds the whole shelf: 22 claims from 102 popular money books, every figure dated, every source named, and the arithmetic worked through for three countries.
Get The Money ShelfAll 22 claimsMore books from the shelf