Don't you wish you could push the easy button and automate your way to wealth? That would be pretty awesome, wouldn't it?

I don't have an easy button to offer, but I can introduce you to some ways to put a process in place that is close.

The biggest challenge I see in the clients I've worked with over the years in my financial planning practice is self-discipline. I don't say that disparagingly. What I'm saying is that my most successful clients had the discipline to set financial goals for themselves and the control to do the things necessary to accomplish them.

Everyone's situation is different. We have different jobs, different family dynamics (kids, no kids, two incomes, one, etc.). And there are many ways to achieve goals.

However, there is one common denominator in all financial goals – saving a lot of money.

Yup. It's that simple.

It does bring up some questions. What's the best way to do that? How much do I save? Where do I put it? How much should I have in taxable vs. non-taxable? Do I need an emergency fund? If so, how much?

We won't be able to answer all of these questions here. What I will offer you by way of a story is how to save a lot of money, even if you're not a disciplined saver.

Does that sound good? OK. Let's get started.

The automatic millionaire

The Automatic Millionaire is the title of a great book written by David Bach. Originally written in 2004, he published an updated and expanded version in 2017.

The opening story in the book tells of Jim McIntyre, who the author describes as “a middle-aged middle manager for a local utility company.” Mr. McIntyre (Jim) attended one of Mr. Bach's (David) investment classes at a local adult-education program. After the class, Jim asked if he could make an appointment with David. Keep in mind that David was in his mid-twenties at the time and just starting his career.

Jim and his wife came to the meeting and informed David he was retiring the following month. David, shocked by the comment and steeped in preconceived ideas about them, interrupted the conversation. He was incredulous that someone in their early fifties (before the FIRE movement became popular) would be retiring. Most of the folks David met came to him to ask when they could retire. Jim told him when, and that it was happening in a month.

They did not make a high income. The year before meeting David, they made $53,946. They had no debt; they owned two houses, their residence, and a rental. Jim had over $600,000 in his 401(k). Sue, Jim's wife, had two retirement accounts worth around $72,000. They owned $160,000 in municipal bonds and over $62,000 in cash in the local bank. Along with other personal property, their net worth was nearly $2 million!

These facts shocked David. He had sized them up incorrectly. He put them in a box that didn't fit. The facts presented to him blew him away. So how did they do it? How did this seemingly average income couple amass so much wealth without debt?

Read on.

Simple concepts (not new)

The first principle Jim and Sue adopted was to pay themselves first. Nowadays, that's the buzzword you read or hear from most finance bloggers. I've written about it too. I've talked about making the savings goal a part of your budget.

In many cases, we put paying our bills ahead of paying ourselves. Depending on your expenses, that may not leave anything (or the feeling of it) for saving. When saving is a line item in the budget, it's easier to do.

Jim and Sue talk about the difficulty of setting up the habit. Once it becomes a habit, it's easier to continue. They decided to start by contributing four percent of their salaries. They eventually increased that amount. At the time of their meeting with David, they were putting away fifteen percent. On average, they say the number is closer to ten percent.

The point is, they did it every paycheck. The couple never counted it as part of their income. Nor did they ever use it to fudge on material things. And they stuck to their plan and stayed with it during their working years.

The latte factor

Many of us have heard of the modern day concept of the latte factor. You know, the one that says rather than spending money every day on a $4.50 coffee drink, put that money into a savings or investment account. Drink your coffee at home and put that money to work.

That's simple, not easy. I have friends who if asked to give up their fancy coffee drinks, would look at me like I was from Mars or something. The concept is sound. And it goes back to the discipline idea and how bad you want to reach your goals.

In Jim's case, his father didn't call it the latte factor. Those fancy drinks weren't around during his time. His concept was much more straightforward. He called it the, “don't be dumb with your money” factor. He told them if they saved a few dollars a day regularly, they could eventually buy a house; that owning was far better than renting.

Jim and Sue took this seriously. Remember, part of their net worth is their primary residence and a rental property. The value of their home at the time was $450,000, while the rental appraised at $325,000. They owned both free and clear with no mortgages.

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The mortgage trick

Jim's parents taught them it's better to own rather than rent. There's another more important lesson they added. Own the house free and clear without a mortgage. How did they manage to do that? Again, it's a pretty simple concept.

Instead of paying their regular monthly mortgage payment, they paid half of it twice a month. This allowed them to add one extra payment a year to the balance. Jim figured that would cut five years off the thirty-year term. Jim and Sue did even more by paying additional payments over and above this strategy. They bought their home when they were in their twenties. It was paid off in their thirties.

The strategy worked so so well they decided to it again. Not having a mortgage payment allowed them to save that money toward a down payment on another house. The plan was to upgrade their home and make their current house a rental. They employed the same strategy of paying the mortgage off early. And you see the result. They now own two properties without a mortgage. The rental property provides a steady income stream to supplement their retirement income.

Jim and Sue sound like some of the most disciplined savers out there, don't they? They don't see themselves as disciplined at all. Does that surprise you? It did me.

Alright. It's time to tell you their secret. If you paid attention to the title, I'm sure you've figured it out by now.

The key to success – automation

Jim and Sue said that if they had to do these things on their own, they would never have achieved what they did. Knowing themselves, they found ways to take their lack of discipline out of the equation.

Adopting the pay yourself first strategy was the beginning. They had a percentage of every paycheck deducted automatically and sent to a savings account at the bank. What that meant was they never saw the money. If you never see the money in your check, you learn to live on what you have. I know what some of you are thinking right now. Yeah, but the money is still there. It's in a savings account they can access at any time. That's true enough.

The difference for Jim and Sue was they were set in their goals of what they wanted in life. The inheritance from their parents was the knowledge about spending and saving passed on to them. Their parents taught them to pay cash for everything, except the house, and not spend money on frivolous things. Their parents called it protecting yourself from yourself. Automating everything they could, Jim and Sue protected themselves from the temptation to spend on things that didn't fit their goals.

In those days, companies still offered pensions, which guarantee a retirement income. Jim's pension allowed him to contribute extra money to his account. He automated those payments, sending a set amount every paycheck as an additional deposit to his retirement.

The bank offered the ability to automate mortgage payments. They jumped at the chance. In addition to the monthly option, they set up the twice a month payment schedule plus extra to pay down the mortgage early.

They had concrete goals for their lives. Also, they knew themselves well. Setting their savings, investments, and mortgage payment on autopilot is how they got where they did. They called it becoming automatic millionaires. Hence, the title of the book.

Practical application

What can we learn from Jim and Sue? How can we apply it today?

I think that's pretty simple. To gain wealth, automate the process. David Bach told Jim and Sue's story from The Automatic Millionaire in 2004. That means it started in the seventies or earlier. The technology was entirely different back then. Pensions were the primary source of retirement. Defined contribution retirement plans like 401(k)s didn't start until 1978. You might argue that Jim's pension provides the retirement income that allowed them to do what they did. Of course, that helped.

But don't miss the larger point. By automating everything they could, Jim and Sue amassed a net worth at age 52 of nearly $2,000,000.

The lessons: Save at ten to fifteen percent of your income. Live debt free. Never carry credit card balances. Consider a rental property to draw passive income.

Jim and Sue's frugal living means they will pass on a nice inheritance to their kids.

More than that, they've passed on the legacy of how to spend, save, invest, and manage money to their children. That's a generational transfer much more valuable than the money and property, isn't it?

Final thoughts

The internet age was beginning during Jim and Sue's working years. In today's world, technology allows us to automate almost everything.

There are apps like Digit to help us save automatically by pulling extra money from our checking account based on our balance. We can do the same with investing apps like Acorns and Stash that take your spare change and put it into an investment account.

Of course, every company has programs to automate savings. Many have credit unions linked to the company. Employer retirement plans get funded through payroll deductions. They offer generation contribution limits (2018 limits – $18,500 or $24,500 if over 50 ) to help prepare for retirement. Never before has it been so easy to automate savings and investing.

Almost any mutual fund and brokerage firm offer automated investing options. There is no excuse for not taking advantage of these options. You can see from Jim and Sue's story how well this works. Starting early makes it much more comfortable. Even so, it's never too late.

If you've never been good at saving money and you're trying to do it without automation, I encourage you to change your ways. If you're participating in your company's retirement plan, you're already doing it. Expand it to everything you can, including mortgage payments, investing, funding of IRAs, college education funds, and any other goal you're trying to achieve. If you need help determining how much to save for each of these goals, consider a financial plan.

Take the path that Jim and Sue took. Learn to live on less than you make. Save and invest. Avoid credit card debt. Accelerate your mortgage payments. And the most important thing – automate the process.

Now it's your turn. What parts of your financial life are automated? What other things can you automate? How has that changed your finances? Let me know in the comments below.