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Review of Automatic Millionaire Homeowner by David Bach
By JLP | February 15, 2006
I received a preview copy of David Bach’s newest book Automatic Millionaire Homeowner
The whole idea behind this book is that you, the reader, can become a millionaire simply by owning a home. Of course, that’s not all there is to it, but for the most part, Bach believes that by knowing how to manage home ownership, the average person can become a millionaire (at least in net worth) over a lifetime. Now, before I go any further, I want to say that this isn’t a get-rich-quick book.
The book opens with a conversation that Bach had with a couple he met at a seminar he was giving. Me being the skeptic that I am, wondered whether or not this conversation really took place. Nevertheless, this couple told Bach about their lifetime experiences in homeownership and about how those experiences made them millionaires. What was fascinating to me is that this couple really did nothing that extraordinary. They simply started out small and gradually moved on to bigger homes over the years. It’s an interesting opening for the book and made me want to continue reading.
Where Bach seems to be too optimistic is when he talks about how much home a typical person should be able to afford. He uses the standard provided by the Federal Housing Administration, which states that the average American should be able to afford to spend 29% of their gross income on housing costs (mortgage, taxes and other related expenses). If they have no other debts, they should be able to spend 41% of gross income on housing. He then goes on to say that a family that makes $50,000 per year could easily carry a $200,000 to $300,000 mortgage. That just seems too high to me. It seems like you would be living to pay your house note.
The book is full of all sorts of checklists and useful websites. It’s a great resource for pretty much anyone who is a homeowner or wants to become a homeowner. He gives tips on what to ask a mortgage broker as well as advice on what to ask a realtor BEFORE you hire them. He also offers advice on how to make your mortgage payment automatic and save thousands of dollars in interest over the life of the loan by simply paying your mortgage note every two weeks rather than once a month. I’ll write more about this idea at a later time.
This is a great book. It is one that would make a great gift for a young married couple just starting out or someone approaching retirement. It has JLP’s Seal of Approval.
BLOGGERS: If you have reviewed this book, send me an EMAIL (not a comment) with the link to your post and I’ll include a link to your review.