Book Review: Automatic Wealth by Michael Masterson

This isn't a typical wealth-building book.

Most (good) books on wealth-building (like The Automatic Millionaire or The Millionaire Next Door) will advocate spending less than you earn and investing the difference from a young age. This is tried-and-true advice, and many of the people who follow this advice are comfortably well-off. I certainly recommend these books.
Michael Masterson's Automatic Wealth also advocates saving, but beyond this he makes a bold claim: It doesn't take 30 years of scrimping to be financially independent; he can teach you how to do it in 7 to 15 years!

The book is filled with life lessons — he wasn't always the model employee! — and practical advice. It's radical advice, but with it comes a radical payoff. I've only begun to follow what he outlines, but it makes sense:

Recognize reality and the bleak financial future you probably have.
Plan to become wealthy and make it a priority by writing down goals. This does not mean becoming a mercenary.
Develop wealthy habits that aid your saving.
Radically increase your income. This is the “aha!” step that jumped out at me when I read the book and it's what differentiates Automatic Wealth from other wealth-building books. It's also the most work and takes the most soul-searching. The main benefit of bringing in more money is that it makes it much easier to save a good chunk of that money, and it makes it possible to put the money in conservative, capital-protecting investments.
Get richer while you sleep by developing passive streams of income.
Retire early. He also gives reasons why you might not want to!

Again, the gem in this book (among many) is the observation that you can save more easily if you bring in more money. This may mean a career change (that's the radical part) but at the very least it's a lot of deliberate work.

He also has a free newsletter called Early To Rise that I read all the time. (Now if I could just get my behind out of bed in the morning!!)

I highly recommend Michael Masterson's Automatic Wealth.

2 thoughts on “Book Review: Automatic Wealth by Michael Masterson”

I really like taking the principles from both types of methods. I think reducing your expenses and debt is a very good thing to do. Then, start an automated way of slowly saving to get to financial independence. Once you get started down that road, though, and you can see how it is almost guaranteed, then you need to work toward a way to short-circuit that from 30-40 years, to 10-15 years. That is what I am doing. I took a job about 5 months ago that gave me a 40% raise… although that really only brought me to where I should have been at my previous job. While I make more money, I am not really progressing the way I would like to, and I am slowly looking for a different job. It is easy to look for a new job when you are pretty comfortable with what you have. I am looking for a job with more responsibilities and a pay increase of at least another 16%. Beyond that, I am starting a business that will be inline with my current employment. However, I do not want to venture that far until my wife gets out of school and gets a job as a nurse with decent benefits. Plus, I am looking to refinance my home next January, and I need to show that I have regular income to qualify.

So, multi-pronged is the way to go.