Financial Book Review 2, or There Is No Perfect Pepsi
I mention this, because I decided to read three more financial books, Smart Couples Finish Rich, The Millionaire Next Door, and its sequel The Next Millionaire Next Door. After reading them, as well as some discussion from friends, I've decided/agreed that just like there is no Perfect Pepsi, there is no Perfect Financial book to give to others.
With that in mind, I should amend my rating for Bach's The Automatic Millionaire, then, to probably 2 or even 2.5/5 rather than the 1 I originally gave it. The point of the book is to get people interested in saving and investing, and an embellished story may not hurt. After all, I didn't try to make the math work when I read it the first time around.
I happened to borrow Smart Couples Finish Rich, also by David Bach. I liked this book much more than The Automatic Millionaire. There were more actionable steps like writing down your values and then some task-based steps to get you started. There was more to do than just read the book. The stories that accompanied didn't seem as embellished as his other work. It covered largely the same material, but I felt it was more accessible and helpful. I would suggest couples use this to start their financial journey together.
I read The Millionaire Next Door, my second reading as I had read it in 2016. I remember really enjoying it. For this reread, while the information is good, it's very dry and, well, very clearly written in the 90s. Wives in the examples are either hairstylists, teachers or homemakers. A particularly "of the times" question: "Do you have a fax machine and a need for a sports utility vehicle?" Nothing bad about those occupations, but just a sign of the times. The researchers surveyed people (ok, the book is from the 90s, it's just men) who have a net worth of at least one million dollars. The theme running throughout the book is how middle-to-high income wage earners or business owners become millionaires: They spend less than they bring in, and invest. Many do it by scoffing at keeping up with The Joneses in their own income group, or they are an owner of a business that creates blue collar jobs. They often worked up from the blue collar job to management, then their own business. By staying in their original income group, they are able to spend like their original salary would afford them without feeling out of place. I am unsure if I would suggest this book to others. If they were a high income earner who felt they just weren't getting ahead, this could be a good book. For others, I could see them being demoralized reading about the high salaries of doctors, lawyers and business owners even though the principles are the same.
After, I wondered if there was an updated version for current times. Turns out, there was! The author of the original book was working on a sequel when he was tragically killed by a drunk driver in 2015. His daughter finished the book for him, and published it in 2018. The Next Millionaire Next Door is a great update to the original. It isn't as dry, and has a woman working as an executive, even! The concepts are the same, though - frugality is a core value, and millionaires tend to be wealthy before getting a large home rather than buy a large home in anticipation of wealth. It focuses on the idea of buying the best item that's important to you, but in certain circumstances, like buying a nicer home in a suburb that isn't the most desirable in the city. There are a few updated parts, like breaking down the time spent between millionaires and non millionaires. However, it still has the same chapters of understanding the importance of budgeting and investing, just written in a slightly different writer's voice, since it's written largely by the original author's daughter. I like it a little more than the first book and would rate it a little higher.
With all that said, what book would I recommend? It depends on who is asking. There is no perfect financial book - except for the one that will get someone excited to save and invest for their future.