{"id":24882,"date":"2026-01-23T06:29:08","date_gmt":"2026-01-23T06:29:08","guid":{"rendered":"https:\/\/finderica.com\/?p=24882"},"modified":"2026-01-23T06:29:08","modified_gmt":"2026-01-23T06:29:08","slug":"podcast-106-the-automatic-millionaire-in-an-automated-world-with-david-bach","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=24882","title":{"rendered":"Podcast 106: The Automatic Millionaire in an Automated World with David Bach"},"content":{"rendered":"
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David Bach joins Steve Chen to discuss the evolution of The Automatic Millionaire<\/a> and his newest idea, the IRA Flat Tax, which aims to rethink how Americans use their retirement savings. Bach explains that decades of automation have helped millions accumulate wealth, but most retirees now delay spending their money until required minimum distributions, leaving trillions of dollars idle. He proposes a limited window allowing early retirement withdrawals at a flat tax rate to encourage spending, improve retiree quality of life, and stimulate the economy. The conversation also explores the difficulty of shifting from saving to spending, the importance of enjoying wealth while health allows, and how AI is reshaping financial planning without replacing the need for human guidance, reinforcing Bach\u2019s long-held belief that money is ultimately a tool to support a better life.<\/p>\n

Watch the video on our YouTube Channel<\/a>:<\/p>\n

\n<\/div>\n

Listen Now<\/h2>\n

Listen to the podcast on Simplecast<\/a> or right here:<\/p>\n

\n<\/div>\n

Callouts: \u00a0 <\/strong><\/h2>\n

www.davidbach.com<\/strong><\/a><\/p>\n

www.IraFlatTax.com<\/strong><\/a><\/p>\n

Instagram<\/a> | Facebook<\/a> | X<\/a> | YouTube<\/a> | Linkedin<\/a>\u00a0<\/p>\n

[10:55 \u2013 11:20] Die With Zero<\/a> By Bill Perkins<\/p>\n

[17:10 \u2013 21:30] The Automatic Millionaire<\/a> By David Bach<\/p>\n

[17:15 \u2013 17:55] Smart Women Finish Rich<\/a> By David Bach<\/p>\n

[18:00 \u2013 18:20] Smart Couples Finish Rich<\/a> By David Bach<\/p>\n

[18:40-18:55] Who Moved My Cheese?<\/a> By Spencer Johnson<\/p>\n

Transcription<\/h2>\n<\/div>\n<\/div>\n

Steve Chen (00:04<\/a>):<\/strong><\/p>\n

All right. Hi folks. Welcome to Boldin Your Money. Today I\u2019m joined by David Bach, founder of FinRish Media and co-founder of AE Wealth Management. And he\u2019s a ten-time New York Times bestselling author, mainly known for The Automatic Millionaire<\/a>. So David has spent decades helping people simplify their money and find best practices. Today we\u2019re going to talk about one of his big new ideas that he\u2019s promoting. So we\u2019ll jump into that in a second. And David is joining us from Florence, Italy. And he is originally though from the East Bay, so near where I am in Marine, California. So with that, David, welcome to our show. Well,<\/p>\n

David Bach (00:41<\/a>):<\/strong><\/p>\n

Steven, thank you. It\u2019s great to be with you. It\u2019s a true pleasure.<\/p>\n

Steve Chen (00:45<\/a>):<\/strong><\/p>\n

Yeah, I appreciate you making the time. But I\u2019d love to learn actually first why you\u2019re in Florence, Italy. That sounds pretty cool.<\/p>\n

David Bach (00:51<\/a>):<\/strong><\/p>\n

Well, it\u2019s funny when talking here in the Bay Area, because I\u2019m a Bay Area kid. So I\u2019ve come from, grew up in California. I moved to New York for nearly 20 years. I moved to New York, so I literally could go and teach millions of people to be smarter with their money because all the \u2026 Back in the day, you really need to be on national television.<\/p>\n

(01:09<\/a>):<\/p>\n

And so moving to New York allowed me to be on all the major shows, the Today Show, CBS Early Shows, CNBC. And that\u2019s what really helped my career take off. I had been working at Morgan Stanley in the Bay Area. My office was in Orenda. Then I moved to New York, spent 18 years there, wrote, as you said, 10 New York Times bestselling book. And the Automatic Millionaire was really a big book that I put out 20 years ago after moving to New York. And so I spent 18 years there. And then my last book was a book called The Latte Factor. And in that book, the main character takes a sabbatical. And so I decided as I was writing that book, well, I want to take a sabbatical. And so I wanted to take my family to live abroad for a year. And it was really a very intentional decision.<\/p>\n

(01:55<\/a>):<\/p>\n

I wanted to move to somewhere abroad so that my kids could get an international experience before they went to college. And so we chose Florence because, well, it\u2019s Italy and Florence is one of the greatest cities in the world and it\u2019s gorgeous. And I thought it\u2019d be really fun to move here for nine months. And we came here when my oldest son was in 10th grade. His name\u2019s Jack. And then everybody fell in love with it and nobody wanted to leave. So we stayed. Now I\u2019ve been here six years. He\u2019s back in the States. He\u2019s just finishing college. But my younger son and my wife and I have been here now since 2019.<\/p>\n

Steve Chen (02:28<\/a>):<\/strong><\/p>\n

Oh, that\u2019s incredible. Yeah. I actually worked in Italy for a little while early in my career as a consultant. We did some work in Mestre outside of Venice and outside of Milan. But unfortunately I dn\u2019t pick up Italian. One of my friends actually ended up marrying an Italian and staying there. But how\u2019s your Italian?<\/p>\n

David Bach (02:42<\/a>):<\/strong><\/p>\n

That\u2019s what happens. My kids have picked up Italian. I\u2019ve barely picked up Italian because you end up living \u2026 Well, at least in our case, you live in a city like Florence, everyone speaks English. But that\u2019s my excuse at least. Florence is an incredible city living in. If you like Italy, it\u2019s so well located. You\u2019re in the middle of everything. So it\u2019s just been a really fun lifestyle. So it kind of has led me to a slower pace of life after Manhattan for 18 years.<\/p>\n

Steve Chen (03:13<\/a>):<\/strong><\/p>\n

Yeah. I can imagine that\u2019s got to be such a gear shift for you. Do you think you\u2019re going to end up staying there?<\/p>\n

David Bach (03:18<\/a>):<\/strong><\/p>\n

Yeah. It\u2019s the question that everybody asks when you\u2019re an expat. When are you coming back? My family still lives in the Bay Areas. My mom\u2019s there and my sister\u2019s there. So I come back about every 90 days and visit family. And my son\u2019s in Chicago, but we like living in Europe. It\u2019s a great lifestyle. And I like skiing. So I\u2019m a big skier. I ski in Europe. I\u2019m going to leave here in two weeks and go ski in Switzerland for the ski season in Verbier. Nice. Yeah. But I\u2019ll come through the States. I come through the States about every two to three months.<\/p>\n

Steve Chen (03:44<\/a>):<\/strong><\/p>\n

Yeah. Well, a couple days ago I was up in Tahoe trying to get a couple days in before my youngest had to go back to school on Wednesday. So we were skiing up at Alpine. And I\u2019ve actually been to the \u2026 It\u2019s like Cortina, right? They\u2019re going to have the Olympics in Cortina, aren\u2019t they? Yeah.<\/p>\n

David Bach (03:59<\/a>):<\/strong><\/p>\n

Exactly. Yeah. The first place after ski was Alpine. I learned how to ski at Alpine. I was in Mogul Ski Club.<\/p>\n

(04:07<\/a>):<\/p>\n

I know Tahoe finally got some snow because it has been pretty bare lately, but you guys just got dumped on.<\/p>\n

Steve Chen (04:14<\/a>):<\/strong><\/p>\n

Yeah. A little bit of a Christmas miracle. So we can riff on all kinds stuff. All right. Well, anyway, look, I\u2019d love to get into your first big idea though, like this IRA flat tax idea that I know we\u2019ll link to your site at davidbach.com, but I know you have a whole IRA flat tax kind of discussion there. We\u2019d love to learn more about that idea and why you\u2019re so enthusiastic about it.<\/p>\n

David Bach (04:32<\/a>):<\/strong><\/p>\n

Yeah. Well, so Steven, in updating the Automatic Millionaire book, which I know you got to hear me talk about at FinCon back in 2017, this is the fifth time I\u2019ve updated the book. In updating the book, it hit me looking at all the statistics. Wow. We got a lot of money in retirement accounts. We\u2019ve got $45 trillion in retirement accounts. And having spent my entire life in financial services, being a financial planner, being a co-founder of a registered investment advisor, I know firsthand that when you run financial plans, all financial planning software defaults to take retirement money last. So people who have money, who have saved and invested, they are advised and they\u2019re told, \u201cTake your retirement dollars as late as you can. Take them at RMD age, which is age 73 or 75.\u201d And so I had a thought in my mind, which was, I wonder what percentage of people are waiting to take money out.<\/p>\n

(05:30<\/a>):<\/p>\n

And when the new AI engines came out and all the ability to ask questions of ChatGPT and Gemini and Perplexity, I was able to get the answers to all my questions. What I was able to find out is 83% of retirees won\u2019t take a dollar out of the retirement account until the RMD age, until the required minimum distribution age. So that\u2019s eight out of 10 retirees not taking money out and they\u2019re taking it out age 73 or now it\u2019ll be 75 depending on your age. And it hit me, that\u2019s about $20 trillion right now that\u2019s in baby boomer retirement accounts just sitting there that if it was able to come out of these retirement accounts, could do a lot of good. It could help you if you\u2019re retired, it could help the economy where you live. It could help your kids buy homes. It could help your grandchildren.<\/p>\n

(06:22<\/a>):<\/p>\n

It could pay down debt. There\u2019s just so much good this money could do or it could just stay in investments, but it could be moved from your retirement account to a taxable account. Well, how would you pull that off? You would give retirees a huge carrot. You\u2019d say, instead of paying ordinary income tax, we have a special deal for you. It would take somebody like Trump to do this. We have a special, and I recommended it as an eight year tax law. We have an eight year window here where for eight years you can take money out of your retirement account before RMD age and you can pay a flat tax. And so we use the AI engines and we ran it at 10% flat tax, 12% flat tax or 15% flat tax. And for the sake of the argument, we wrote a white paper showing what would happen if you took it out at 12%, how much money would come out, basically.<\/p>\n

(07:13<\/a>):<\/p>\n

And it could be trillions of dollars. It could increase the GDP of America by a quarter of 1% to 1% annually.<\/p>\n

(07:22<\/a>):<\/p>\n

It could pull forward up to a trillion dollars in tax revenue. And the more important thing is, honestly, what it would do is recirculate the money and start to move all this money around. So it would really give the economy a huge boost and most importantly for retirees could make the retirement a whole lot better. I say there\u2019s two stages, save and invest and spend and enjoy. And we have spent the last 40 years on saving and invest and we have not spent enough time on spend and enjoy. And so we\u2019re at a point now where people have got a lot of money put aside and they\u2019re not using it. And it\u2019s great the stock market\u2019s gone up and it\u2019s great that real estate\u2019s gone up. But man, what\u2019s the point of having saved all this money if you can\u2019t actually put it to some use and have some fund before you pass away or you\u2019re too old to use it?<\/p>\n

(08:08<\/a>):<\/p>\n

And so my idea was if we had a flat tax, an eight year tax window, we\u2019d incentivize baby boomers to start moving money out of these accounts and it would encourage people in their 50s to save more money for retirement. So on IRAflattax.com now there\u2019s a whole website with podcasts and white papers and a Google Notebook LM where all this stuff\u2019s been put there to open source this idea. Because what I\u2019m doing now is I\u2019m talking about it on podcasts, talking about the media and starting to talk about it with senators and congressmen to try to get this idea populated and ideally in front of the president. I don\u2019t have a personal relationship with president, but it will take \u2026 If anybody could get this done, it would be Donald Trump because Donald Trump, somebody said, \u201cHey, why do we have to pay taxes on tips?\u201d And he was like, \u201cIt\u2019s a great question.<\/p>\n

(08:58<\/a>):<\/p>\n

You should get rid of that. Hey, why don\u2019t you pay taxes on social security?\u201d That\u2019s a great question too. Now we\u2019re almost writ of taxes on social security. So a lot of these ideas that seem like, well, that could never happen. I don\u2019t know. I think anything\u2019s possible right now. I think America needs some big ideas.<\/p>\n

Steve Chen (09:12<\/a>):<\/strong><\/p>\n

Yeah. Are you getting traction with people in Congress and-<\/p>\n

David Bach (09:15<\/a>):<\/strong><\/p>\n

I had calls last week with senators. So the fact that senators would get on a call with me to discuss this idea was<\/p>\n

(09:23<\/a>):<\/p>\n

Actually before the holidays, two weeks now, very encouraging. And the conversation was very interesting too because they all agreed the idea that it needs to be bipartisan and I said it also needs the president to want it. It\u2019s not this president, it could be the next president because this is a big, big, big idea. One of the things I said to this senator, who I won\u2019t say who it is, so nobody\u2019s put on the spot, but I said on this call, the largest sovereign wealth funds in the world are in the Middle East. If you add up every sovereign wealth fund in the Middle East and you combine them, it\u2019s $7 trillion.<\/p>\n

(09:58<\/a>):<\/p>\n

If you take all the sovereign wealth funds in the world, it\u2019s $12 trillion. I said to the Senator, \u201cYou have more money in baby boomer retirement accounts right now than all the sovereign wealth funds in the world, and that money is not leaving until it is forced to leave at 73 or 75.\u201d And then it\u2019s just leaving in dribs and drabs. People take out the absolute minimum. So if someone\u2019s take out 4%, that\u2019s all they\u2019re taking out. And these accounts are going to just keep growing. We\u2019re going to end up with a hundred trillion dollars in these retirement accounts unless we come up with creative ideas to incentivize people to take the money out.<\/p>\n

Steve Chen (10:39<\/a>):<\/strong><\/p>\n

100%. We see this in our data too. I mean, like Michael Kitzes did some work as well and he\u2019s like, people that retire with money, and that\u2019s like our audience, our typical user has a few million bucks. They\u2019re kind of 50 to 60 year olds, 401k millionaires, and they\u2019ve done a good job saving. They keep saving and they keep building wealth. They do this. They\u2019re not die with zero enthusiasts. Have you read die with zero?<\/p>\n

David Bach (11:05<\/a>):<\/strong><\/p>\n

Yes. In fact, I gave them a testimony for that book, but most people aren\u2019t die with zero enthusiastic because it\u2019s a very hard thing to pull off. And he, by the way, is worth a fortune. So it\u2019s easy to tell people to go spend a bunch of money when you have endless amounts of money. But when someone\u2019s got a million or $2 million, they have a hard time decumulating. They\u2019ve spent their whole life accumulating, but they\u2019re also sold a myth that they\u2019re going to not only live forever, but that their health\u2019s going to stay good forever. And the thing is, when you do financial planning, you actually see in real terms, your 60s look a lot better than your 70s, especially for men. So the time to enjoy your wealth is when you have your health. And in the United States, the average health expectancy, the age that which you will have a health issue that affects the rest of your life is 63.<\/p>\n

(11:56<\/a>):<\/p>\n

So when people talk about living longer, first of all, they\u2019re not living longer in the United States. Now for men, it\u2019s 73 and for women, I think it\u2019s 78. And my dad passed away recently. My mom\u2019s in a senior living community in Livermore, Pleasanton area, beautiful place. Just try me out on this. Go to any nice high-end senior senior living community, go to one of the dinners or the lunches, look around the room, and 80% of the people in the room are women, and that\u2019s because we don\u2019t make it to the 80s, typically. And so we need to be having more conversations around how to really enjoy your wealth during retirement. And that\u2019s why I tell everybody you need to get a financial planner, because what a good financial planner can do is give you permission to spend more money, which when people actually understand that they can afford to spend more money, then often they will spend a little bit more.<\/p>\n

(12:51<\/a>):<\/p>\n

They don\u2019t go crazy, but they\u2019ll spend a little bit more.<\/p>\n

Steve Chen (12:55<\/a>):<\/strong><\/p>\n

Yep. I totally agree that you need to be intentional about this. I mean, one of the big things that we see in our platform is people are like, they have this aha moment where they\u2019re like, oh, I could retire or yeah, I get more confidence. So I feel that I have the permission to spend. And totally agree with you. One of my good friends here, he\u2019s in his mid 60s and he\u2019s like, look, he\u2019s looking at his parents and they\u2019ve been robust, but then they start to decline. He\u2019s like, \u201cI really only think he has like 10 or 15 years, 10 years, and he\u2019s a super healthy Bay Area person to really use my human capital.\u201d And so he\u2019s super intentional about starting to spend money, even though for many of these 401k millionaires, they basically have been trained over decades of saving and being disciplined to accumulate.<\/p>\n

(13:41<\/a>):<\/p>\n

So it is really hard to get that mind shift going. And it is important for people to recognize though that they have limited human capital and they need to spend their money if they want to enjoy it. Otherwise, they\u2019re going to pass away at like in their 80s or maybe 90s, but with maximum money, but who cares? They can\u2019t enjoy it.<\/p>\n

David Bach (13:54<\/a>):<\/strong><\/p>\n

Maximum money without getting to have had maximum retirement. And I really think the whole purpose of money is that money\u2019s just a tool to live your best life. And there are so many ways to live your best life. But look, I\u2019m the guy that spent 33 years of my life teaching people how to save and invest in retirement. And the automatic mailer\u2019s now for 20 years now. I updated it for another generation so that we could reach young people one more time so that we could create more automatic millionaires. I think it\u2019s important to build wealth and be financially secure. And then I think it\u2019s important to use your wealth to live your best life. And the financial service industry, this will be our next evolution will be how do people get \u2026 I was just on a podcast with Gene Chatsky. We\u2019re talking about how do people get forever paychecks.<\/p>\n

(14:41<\/a>):<\/p>\n

People want these revenues, the revenue to come in even if they\u2019re not working. And when so many people are waiting too long, even Social Security, the bulk of the industry tells people to wait to take Social Security. I tell people, if you don\u2019t need the money, take Social Security as early as you can. Why would you wait? Take the money and enjoy it. We\u2019ll have fun with it.<\/p>\n

Steve Chen (15:03<\/a>):<\/strong><\/p>\n

Right. If you don\u2019t need to hedge it. Do you know Azul Wells ever heard of that guy? He\u2019s a YouTuber, YouTube influencer, former advisor, and he talks a lot about this, the age 63 kind of like health thing that happens for men that it\u2019s a big risk and most people don\u2019t think about it.<\/p>\n

David Bach (15:17<\/a>):<\/strong><\/p>\n

I don\u2019t know him and I will tell you, so my thing is skiing. When I\u2019m not doing financial education, I lived a skiing. I\u2019m very aware of the fact that now when I go skiing with those friends of mine who still ski, because people stop skiing when they get to \u2026 I\u2019m 59. Usually you\u2019ll see a lot of people on the mountain in their 60s. And we were on the mountain two or three weeks ago. I was in Verbia and my friend said, \u201cHow many people do you think ski over 65? What percentage of skiers are over 65?\u201d And now you can just turn around and ask ChatGPT. So he asked ChatGPT on the lift and the answer was 3%. And I was like, \u201cWhoa, that\u2019s an eye-opener.\u201d And that\u2019s because people, you were not always in shape to do these things. So I\u2019m very focused on how can I be as healthy as possible so that I can be as active as possible.<\/p>\n

(16:10<\/a>):<\/p>\n

It\u2019s not just living long, it\u2019s living healthy long, as long as possible.<\/p>\n

Steve Chen (16:15<\/a>):<\/strong><\/p>\n

I think more people are reading up on Peter Attia and just getting super thoughtful about their \u2026 Not everybody, but definitely in the Bay Area. And I like you, I\u2019m a skier. And it\u2019s interesting that you do see \u2026 I was skiing midweek and there are a bunch of retired people that are super active, but yeah.<\/p>\n

David Bach (16:33<\/a>):<\/strong><\/p>\n

That\u2019s because the retired people can ski midweek.<\/p>\n

Steve Chen (16:36<\/a>):<\/strong><\/p>\n

Yeah, exactly. They can do it. But yeah, you have to be super intentional about staying strong. The similar stat, I remember someone told me that the number of people that ever sprint after age 35 is like 2% or 1%. It\u2019s like you don\u2019t realize it, but these things that you did when you\u2019re a kid, like you\u2019re running full out, that stops in your early \u2026 You just never do it again. And you don\u2019t think about it, but that\u2019s the same thing. Yeah. At 65, 3% of people are skiing or whatever. It\u2019s like it just happens and people don\u2019t notice it. All right, cool. Well, look, I\u2019d love to shift gears and talk a little bit more about the automatic millionaire. Why did you originally write that book? What motivated that?<\/p>\n

David Bach (17:12<\/a>):<\/strong><\/p>\n

So I\u2019ve always gotten my book \u2026 So the first book I wrote was Smart Women Finish Rich. I started teaching a class in Lafayette, California for my clients, for my women clients on money. This is in the \u201990s. There were no classes on women and money. There were no books on women and money. I got asked in my first class, the Lafayette Park Hotel, what\u2019s a good book for women and money? And I said, \u201cI don\u2019t know if there is one. I\u2019ll go to the library and I\u2019ll look.\u201d And there wasn\u2019t one. And so I ultimately would teach that class over and over and over again. And then I got invited to do a speech at the Moscone Center. And I had this big venue and I was going against John Gray, men are from Mars, women are from Venus Fame, and everyone stood in line waiting for my book and I didn\u2019t have my book.<\/p>\n

(17:57<\/a>):<\/p>\n

And so I finally wrote the book that was what I had been teaching, which was Smart Couples, which was Smart Women Finish Rich<\/a>. And that was what I had done for my clients. Then all these women came back to me and said, \u201cNow I need a book to do this with my husband.\u201d That led to Smart Couples Finish Rich.<\/p>\n

(18:14<\/a>):<\/p>\n

The Automatic Millionaire<\/a> came to be because as I went around the world teaching these principles, people would come up to me at the end of my events and say, \u201cDavid, I got your book here. I just want you to tell me what\u2019s the one thing I need to do. Just give me the secret to being a millionaire. There must be one thing I need to do. \u201d And I would find myself answering over and over again, \u201cWell, the secret is you have to pay yourself first automatically.\u201d And then somebody\u2019s like, \u201cWell, why don\u2019t you write that book?\u201d And so the automatic million really came me like, \u201cYou know what? This is what I need to teach. I need to simplify this. \u201d People don\u2019t want always the full blown financial planning guide. How could I write the who moved my cheese of money? That was my goal,<\/p>\n

(18:58<\/a>):<\/p>\n

A really short, simple, easy book that anyone could read on any income to build financial freedom for life. And I based it on a ordinary couple. You were talking about how you have all these ordinary 401k millionaires. I was at Morgan Stanley and I had those clients too. And I had a client come into my office. They weren\u2019t a client actually. We call them a prospect. They had come to a seminar and they came in my office and they were able to retire in their early 50s with a very ordinary income. Jim and Sue McIntyre, they had made a little over $50,000 a year. And when they came to my office in his early 50s, he had a net worth of $1.8 million. And I was so blown away by this that I started interviewing him and going, \u201cHow did you do this? How did you do this on such an ordinary income?\u201d And the automatic millionaire book tells his story in the beginning of the book, how him and his wife, what they did.<\/p>\n

(19:55<\/a>):<\/p>\n

And it was really, for me, the turning point in my own life too, because I was making that point over $100,000 a year and I was still living paycheck to paycheck.<\/p>\n

(20:05<\/a>):<\/p>\n

And so I had this moment of realization of like, if I don\u2019t change, nothing\u2019s going to change. I\u2019m under this mistaken belief that if I make more money, then I\u2019ll start saving investing. And I need to look at what my clients have done who have saved on ordinary incomes because I had clients that were from PG&E, Pacific Bell, Safeway, all these local companies that you know, right? All these barrier companies, AT&T, Chevron, and they had built, they had paid their home down with no debt, they had put their kids through college and they had built up these 401k plans that were half a million to a million, maybe a million five. I mean, these accounts are bigger now, but they did it on an ordinary income and they did it automatically.<\/p>\n

(20:49<\/a>):<\/p>\n

So I worked on that book. It was the hardest book I ever wrote because it\u2019s very hard to make financial planning simple. When you\u2019re in the industry and you know so much, it takes a lot of work to take it all the way down to the bare bones. And that\u2019s what I did with the automatic millionaire. And then I launched the book on Oprah and then as they say the rest is history, that book took off and it became the number one best signed book of the year and nonfiction. It\u2019s been out now for 20 years. It\u2019s got, this is its fifth version, fifth update, and over two million copies have already been sold. So I just wanted to put it out one more time to reach the next generation. And also things have changed. Technology\u2019s changed.<\/p>\n

Steve Chen (21:27<\/a>):<\/strong><\/p>\n

It\u2019s an awesome story and it\u2019s definitely influenced so many lives and people talk about the latte factor. And what\u2019s interesting to me is just like the people that learn this stuff, if they\u2019re raised in households that are financially literate or now there\u2019s more people that are being taught in high schools, but it\u2019s still the exception. I think in our generation it\u2019s people like they weren\u2019t taught this stuff. You kind of had to learn on your own. And so it\u2019s really the people that took advantage of time while they were \u2026 I guess it\u2019s like, hey, they learned to pay themselves first, they learned to invest and start capturing returns on the market and they just kept doing it. That\u2019s who has won. But if there\u2019s still so many people \u2026 Do you feel like the curve has bent? Are more people taking advantage of this now?<\/p>\n

David Bach (22:07<\/a>):<\/strong><\/p>\n

Well, they are. More people taking advantage of this because 20 years ago we didn\u2019t have automatic enrollment and 401k plans and that didn\u2019t exist, right? It wasn\u2019t easy to automate paying yourself first 20 years ago. When you came into my office at Morgan Stanley back in the day in the 90s, I would tell you, if you have $50 a month that you can save and invest, I\u2019ll help you. And I would. I\u2019d sit down with you and go through it. And when I did that, the paperwork to set up what they called them a systematic investment plan was six pages long and it took 45 minute meeting and took three weeks to set it up with a bank. It was ridiculous and people didn\u2019t trust it, right? Today people go on there, you can open your phone and you can click on an app and you can automate your financial life in less than 10 minutes.<\/p>\n

(22:54<\/a>):<\/p>\n

You can automate everything. You can automate saving in a retirement account, you can automate an emergency account, you can automate a dream account. And so it\u2019s much, much easier today. However, it\u2019s also easier to separate you from your money. You used to have to get in your car, drive down to a store, think about what you were buying. Today, everything\u2019s on your phone, click, click, click, you\u2019re signed up for life. Everybody\u2019s taking your money from you automatically. And so you have to realize if you don\u2019t have a plan for your money, someone else has a plan for your money. And most people don\u2019t have plans for their money. They should, but they don\u2019t. They have what I call the no plan plan. And the no plan plan leads to a very different place than the person who has a plan. And the thing is, when I was young, the one thing that had a huge impact on me is one of the oldest, older financial advisors came in and talked to the trainees and he was in his 60s, like a little bit older than I am right now.<\/p>\n

(23:54<\/a>):<\/p>\n

And he was getting ready to retire and we\u2019re all in our 20s. And he took actually the chart in the automatic millionaire book, one of the original charts that he showed the power of compound interest with an IRA account.<\/p>\n

(24:08<\/a>):<\/p>\n

And at the end of his talk, he said, \u201cAt a minimum, you guys, do for yourself what you do for your clients. At least make sure you\u2019ve got these IRA accounts set up or you\u2019re using the 401k plan.\u201d He goes, \u201cBecause this office is filled with broke financial advisors.\u201d And we were like, \u201cWhat?\u201d We were shocked because financial advisors are driving a fancy car, they\u2019ve got a country club membership, they\u2019re wearing nice suits, they\u2019ve got attitudes and he\u2019s like, \u201cMost of these guys don\u2019t have any money.\u201d And he was right actually and it stuck with me and what he said, because I remember this like it was yesterday, his name was Jack Saunders, he said, \u201cYou\u2019re going to blink your eyes.\u201d And he went like this, he snapped his fingers and he goes, \u201cYou\u2019re going to blink your eyes and you\u2019re going to be my age and you won\u2019t want to work anymore and you\u2019ll either have money or you won\u2019t, but if you start at your age, it\u2019s easy.\u201d And I was like, \u201cWhoa, okay, well that\u2019s a wake up call.\u201d And he was right, by the way, because I blinked my eyes and I\u2019m now 33 years later, kind of wrapping up my career here, it\u2019s gone by fast.<\/p>\n

(25:14<\/a>):<\/p>\n

I mean, I still feel like the kid in my 20s, but I\u2019m not the same kid in my 20s. It went by really quickly. So I\u2019m glad I did all these things.<\/p>\n

Steve Chen (25:21<\/a>):<\/strong><\/p>\n

Yeah. I think it\u2019s hard for people to get that sense. Same thing, I\u2019m in my 50s and it\u2019s like it goes by quick and everyone tells you it goes by quick and it accelerates and it\u2019s true. And yeah, no, I also get the \u2026 We build financial planning software. I didn\u2019t have a plan for a long time. Now I have a plan. Now I\u2019ve actually talked to one of our advisors and I\u2019ve automated most of my life and it has been game changing, but you have to do it. And then you start to, I think you have these aha moments in your life. One, you start to save and it starts to build, but at a certain point you hit escape velocity where you\u2019re like generating more returns on your capital than you\u2019re saving. And then you\u2019re like, \u201cOh, wait a sec, this compounding thing is very real and it\u2019s accelerating.\u201d<\/p>\n

David Bach (26:05<\/a>):<\/strong><\/p>\n

My son who\u2019s 15 was downstairs doing math homework and he had a chart, looks like a classic stock chart, like a compound interest chart. And I go, \u201cWhat are you doing?\u201d Because he\u2019s doing math work. He\u2019s like, \u201cWell, we\u2019re studying exponential growth.\u201d I go, \u201cThat\u2019s just like compound interest.\u201d And he goes, \u201cYeah, that\u2019s kind of what we\u2019re studying.\u201d And what\u2019s interesting about what you just said, nobody really fully explains this when you\u2019re young, is that the first 10 years when you save and invest, it\u2019s like watching paint dry because not a lot happens in the first decade. Then in the second decade, it starts to grow more, but in the third decade, it just starts to take off. And then before you know it, the money\u2019s really \u2026 Everything you\u2019ve been told, have your money work for you so that your money makes money happens.<\/p>\n

(26:53<\/a>):<\/p>\n

And I think the thing that \u2026 There\u2019s 24 million millionaires in America now when I updated the book. There\u2019s 16 million more people than there were 20 years ago when I wrote the book. I think the thing that I worry about is that those who aren\u2019t saving and investing are getting left behind, just left behind. Because if you don\u2019t own stocks and you haven\u2019t owned real estate,<\/p>\n

(27:13<\/a>):<\/p>\n

You\u2019re just falling further and further behind. Everything\u2019s getting more and more expensive and you just aren\u2019t able \u2026 It\u2019s hard and harder to catch up. And I worry about that for our country.<\/p>\n

Steve Chen (27:21<\/a>):<\/strong><\/p>\n

Yeah. One of the things that I saw at Stat that jumps out, we\u2019re kind of hitting peak 65 right now, where there\u2019s like 10, I think now it\u2019s like 12,000 people a day are turning 65. So they\u2019re hitting that point where many that are forced to retire. And there\u2019s also, for people who have been saving there, I think there\u2019s a thousand new millionaire households a day that are being minted. So there are these households that are really winning and I mean, a million dollars isn\u2019t what it used to be, but it\u2019s still pretty meaningful number. But then what about everybody else? Half this country has like close to zero or negative net worth, which is a big problem. And 25% has kind of zero to $650,000 and the top 25% has 650,000 or more in net worth. So there\u2019s still lots of room to lift up and help many more people get there.<\/p>\n

David Bach (28:09<\/a>):<\/strong><\/p>\n

I just did a keynote. You saw me speak on stage at FinCon. I did this talk recently in Arizona at a very high end group called Genius Network and I talked about all these ideas and I said, basically four out of 10 Americans can\u2019t get their hands on $400 in case of emergency. Six out of 10 Americans can\u2019t get their hands on $1,000 in case of emergency. Now, this talk was when the government was still shut down and I said, \u201cI don\u2019t think a lot of people realize how hard this is for people to shut the government down because they hadn\u2019t gotten paychecks for three paycheck cycles.\u201d So if you live paycheck to paycheck, it means you\u2019ve got one paycheck of savings. Well, there are one out of three American families who make $150,000 a year are still living paycheck to paycheck.<\/p>\n

(28:58<\/a>):<\/p>\n

So it\u2019s not just people with low incomes that are living paycheck to paycheck, it\u2019s also people with high incomes that are living paycheck to paycheck. And the only way you fix that is to actually, for yourself, fix it. The only economy that matters is your own economy. And the Automatic Millionaire book is a roadmap for anyone at any income level to automate their financial life, put it on autopilot, not need a budget, not need discipline. And today I used to say set and forget it. Now I say set it and review it. But I think if you have young people \u2026 The Automatic Miller is a great book to give out as a gift. Come on over to our website, which is davidboch.com and you can read about the book. We have an insider team. I don\u2019t know when this podcast will launch, but we\u2019ve got a live event that I\u2019ll be doing on Zoom.<\/p>\n

(29:47<\/a>):<\/p>\n

They can find out about it on the website. And I think financial education shouldn\u2019t be a nice to, it should be a must to. We don\u2019t have mandatory financial education school When we should. And it leaves people at a huge disadvantage if they\u2019re not taught about money at a young age.<\/p>\n

Steve Chen (30:07<\/a>):<\/strong><\/p>\n

Yeah. There\u2019s a guy, Tim Ranzetta. I talked about him a lot. He\u2019s out here. He\u2019s actually East Bay. He\u2019s actually East Palo Alto guy. He\u2019s an entrepreneur in the Valley and he created next generation personal finance. And that is a group, you might want to talk with him, that has trained 50,000 teachers at this point on how to teach the teachers. They do two things. They teach teachers how to do financial literacy in high schools and they push for legislation. And it\u2019s now in like half the states. So they just passed in California to require personal finance to graduate from high school, which is a huge thing that started to happen. So now those 50,000 teachers teach five million kids a year.<\/p>\n

David Bach (30:49<\/a>):<\/strong><\/p>\n

Please introduce me to him. I think what you just told me, and I talk about this in the automatic owner book to how many states are creating programs or 27 states so far that have created some kind of a program. The key to what you just told me though is what I\u2019ve been talking about for a long time is it\u2019s mandatory and you need to pass some kind of a test to graduate. Because if you make it a one day or a half a day event, people aren\u2019t really paying attention, but if they have to learn something to graduate. By the way, it\u2019s not complicated stuff that you have to learn to graduate. If you just teach people the miracle of compound interest, teach people what happens with interest rates when interest rates go up or down or what happens with credit card debt. None of this stuff\u2019s really that complicated.<\/p>\n

(31:34<\/a>):<\/p>\n

When I was on Oprah with the Automatic Millionaire and she turned to me at the end of the show and she\u2019s like, they should teach this stuff in school. And I said, \u201cOprah, I know they should.\u201d I said, \u201cThis book shouldn\u2019t be needed. Automatic million book shouldn\u2019t be needed. You should graduate from high school and know everything that\u2019s inside this book.\u201d<\/p>\n

Steve Chen (31:48<\/a>):<\/strong><\/p>\n

Yep. 100%. What do you teach? I love the idea of how do you make it simple. I mean, for what it\u2019s worth, we\u2019ve built this platform that people use instead of their spreadsheets to build their own plans. And so they\u2019re enthusiasts and they\u2019re really into it and they\u2019re prolonging these levers. But we see to change the world, it does have to get way simpler. For your own kids, what are the simple lessons that you\u2019ve taught them?<\/p>\n

David Bach (32:11<\/a>):<\/strong><\/p>\n

Oh, I can give you three simple lessons for children. Well, maybe four or five actually. Lesson number one is I teach my kids about investing the same way my grandmother taught me. So my grandmother, when I was really little, she took me to McDonald\u2019s and she said, \u201cDavid, I\u2019m going to teach today how to become a millionaire.\u201d Because I used to like to play Monopoly. She\u2019s like, \u201cI\u2019m going to teach her how to play Monopoly in the real world.\u201d So she took me to McDonald\u2019s. I was seven years old. She said there\u2019s three types of people who come to McDonald\u2019s. Those who eat here, those are the ones who like you right now you\u2019re eating. Yurkwit\u2019s called a consumer and you spend money. The second type of person is somebody who works here. All these people you see working here, they have a job and they\u2019re being paid minimum wage and that\u2019s a hard way to make a living.<\/p>\n

(32:53<\/a>):<\/p>\n

The third type of person is the person who owns this place. They\u2019re called an investor and they own stock in McDonald\u2019s. And when you own stock at McDonald\u2019s, you then will make money off of every single person that comes in here to eat just like you. And that was my first lesson. And so she taught me how to find out about McDonald\u2019s being public and she taught me how to look it up back in the day in the newspaper. And she took me down to a brokerage firm and I bought my first stock. I did that with my kids. They bought Shake Shack.<\/p>\n

\n
\n

<\/h3>\n

#1 Retirement Planning Software<\/p>\n

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(33:21<\/a>):<\/p>\n

So that was my first lesson for them because I wanted them to think about being an investor the same way I was taught. Now, things that I\u2019ve done for my kids since then is my kids have Roth IRAs. So I\u2019ve started my kids with Roth IRAs because I\u2019ve been pounding on them the importance of starting young. And so I\u2019ve got a 15 year old who\u2019s now funding his Roth IRA because I put them on the payroll. We basically been paid for three years and we fully fund his Roth IRA. And my older son, they\u2019ve each got matching Roth IRAs. And I\u2019ve shown my kids, I go to investor.gov or maybe they can use your software. But investor.gov, you can go there and you can go compound interest calculator, takes you to investor.gov, it\u2019s free. And I\u2019ve run the numbers for my kids. And in fact, it\u2019s funny because for Christmas, they got a copy of the Automatic Millionaire and they were laughing, but I was like, \u201cYou got to read the update.\u201d And inside the book was a printout of their IRA accounts, what the compound could look like.<\/p>\n

(34:18<\/a>):<\/p>\n

And so I showed them like, \u201cHere\u2019s how much money you have saved and here\u2019s what it will be worth at 60 if you fund it every year at the same dollar amount and you earn.\u201d And I told them 8% and I showed them 8% or 9% or 10%. And in their case, they\u2019ll have eight figure retirement accounts,<\/p>\n

(34:37<\/a>):<\/p>\n

Like specifically over $11 million. If they fund just $20 a day for the rest of their life. Now, I\u2019m going to help them for a period of time. I\u2019m fishing for them right now and I hope that they will then fish for themselves, but I\u2019m teaching them at the young age these really critical ideas. So that\u2019s what I would start with.<\/p>\n

Steve Chen (35:01<\/a>):<\/strong><\/p>\n

Yeah. I love your grandmother\u2019s story and I love the fact that you\u2019re teaching your kids this. Any other top ideas for like automating, saving, I think obviously watching money being taken away, I do agree with that. There\u2019s lots of ways you can lose your money and also there\u2019s scams and stuff like that. Any huge mistakes that you see people that read your book make?<\/p>\n

David Bach (35:25<\/a>):<\/strong><\/p>\n

Well, I don\u2019t know if they- Or<\/p>\n

Steve Chen (35:27<\/a>):<\/strong><\/p>\n

Maybe they haven\u2019t read it.<\/p>\n

David Bach (35:29<\/a>):<\/strong><\/p>\n

Well, actually, I\u2019ll tell you mistakes that people make, I see all the time. And it pains me, which is why I like to talk about it, not because it pains me, because I don\u2019t want people to make this mistake. I will meet people who come up to me and they will say, \u201cI read the Automatic Millionaire book. I want you to know I\u2019m paying myself first. I opened up a retirement account.\u201d And I will ask questions, \u201cSo Steve, that\u2019s great. Where\u2019d you open up your retirement account?\u201d \u201cI opened it up at Vanguard. \u201c\u201dOh, that\u2019s fantastic.What\u2019s it in? What\u2019d you invest in? \u201d And they go, \u201cI\u2019m in the Vanguard IRA account.\u201d I go, \u201cNo, no, no. Remember in the book I told you you have to put the money inside an investment.\u201d And now they won\u2019t remember what they put it in. So then I\u2019ll go, \u201cWell, let\u2019s open up your phone.<\/p>\n

(36:10<\/a>):<\/p>\n

Let\u2019s look.\u201d So the biggest mistake I see people make is they often open up retirement accounts and they don\u2019t actually invest the money. There are billions and billions of dollars in retirement accounts sitting in cash or nothing, not invested. So it\u2019s really important to get it into at least a target dated mutual fund, which I talk about in the automatic millionaire. It needs to be invested 60%, 70% stock, 30% bonds. I believe in balanced portfolios. So that would be the one mistake, but the mistake I see people making who don\u2019t read my book is young people are taking a lot of risk with their money because it\u2019s never looked sexier and easier to get rich quick.<\/p>\n

(36:53<\/a>):<\/p>\n

And all I can tell anyone who\u2019s young or old is I don\u2019t know anybody who\u2019s gotten rich quick. And now I\u2019m 59. So my son, my younger son got super into trading meme coins. There\u2019s always something, right? There was NFTs, now there are meme stocks and my 15 year old was trading meme coins. And this was before the Trump meme coin came out, but he had taken like $400 and I let him do this even though it was totally against what I believe in. It was his own money and I know it\u2019s stupid and totally ridiculous and risky, but he had all his trading systems in place and he\u2019s getting on investor calls and he\u2019s making money and his $400 had grown to like 8,000 and we\u2019re skiing in Ruby and he\u2019s like, \u201cYou know, dad, you\u2019re trying to make 10% a year. I\u2019m trying to make 10% a day.\u201d And I was like, \u201cJames, I know this is looking good right now, but I promise you, I don\u2019t want you to lose this money, but there\u2019s these things called rug pulls and you\u2019re going to wake up and the thing\u2019s going to go to zero and there\u2019s going to be no money there.<\/p>\n

(37:56<\/a>):<\/p>\n

You don\u2019t know what you\u2019re talking about. \u201d Well, literally within days it went from $8,000 and he was in multiple coins and he went from being up 8,000 to being all gone. And that\u2019s a good lesson for him to learn at young age, but it\u2019s tragic to learn it with significant amounts of money. A lot of young people are losing significant amount of money, taking way too much risk on things that aren\u2019t real.<\/p>\n

Steve Chen (38:19<\/a>):<\/strong><\/p>\n

Yeah. I\u2019ve seen this. I\u2019ve seen this movie with my oldest son, same thing, like he was in crypto with all his fraternity brothers. They basically cornered the market, they owned everything and they were driving it up themselves and then like, \u201cWe have $10 million of this coin.\u201d I\u2019m like, \u201cWhat\u2019s the intrinsic value here?\u201d I told them my stories about like I owned e-trade. I once took e-trade. I had like $400,000 in e-trade from like 20 during the dotcom glory days. And I was like, I remember asking about, \u201cShould I like diversify?\u201d We\u2019re like, \u201cNo, we\u2019re up to huge. Let\u2019s kill that ride.\u201d And then wrote it right back down to like 40 grand or something like that.<\/p>\n

David Bach (38:54<\/a>):<\/strong><\/p>\n

Do you remember, they used to have those E-trade ads and they used to, the e-trade ad was like, \u201cWe don\u2019t have an old brokerage firm, go to e-trade and you can have an island.\u201d And I\u2019m from the dotcom days too, right? They used to call them at Schwab Cisco Ants. That was the phrase that they used inside the Schwab branches. All these people coming over to Schwab to buy Cisco stock today would be Nvidia. Everybody likes a stock until they don\u2019t like a stock, right? Great book to read right now. Have you read 1929 by Andrew Sorkin? No.<\/p>\n

Steve Chen (39:30<\/a>):<\/strong><\/p>\n

All right. I\u2019ll have to check it out.<\/p>\n

David Bach (39:32<\/a>):<\/strong><\/p>\n

Go read that book because it\u2019s a page turner and it\u2019s good to have a lesson and a reminder of what it was like during the Great Depression when the market crashed. But being from the dot com community of the Bay Area, I had a lot of young people coming off with so much money and exactly what you\u2019re talking about. It\u2019s like, \u201cI know you have $10 million right now in ALL stock. Let\u2019s sell at least half of it and buy you a house.\u201d<\/p>\n

Steve Chen (39:55<\/a>):<\/strong><\/p>\n

Right.<\/p>\n

David Bach (39:55<\/a>):<\/strong><\/p>\n

No, no, no, no. It\u2019s going to be worth $20 million.\u201d And then the stock just went off and the people that didn\u2019t diversify were sad.<\/p>\n

Steve Chen (40:06<\/a>):<\/strong><\/p>\n

I think that\u2019s the big thing. I think diversification, continuous diversification, that\u2019s like rebalancing makes a huge difference because you end up, say you own NVIDIA or something, right? Okay, boom, suddenly it\u2019s a massive part of your portfolio and obviously the survivor bias of like people don\u2019t own Apple. It\u2019s like, \u201cOkay, I\u2019ve owned Apple, I\u2019ve owned it for 30 years.\u201d They never want to sell Apple. It\u2019s a tough argument because they\u2019re like, \u201cWell, it\u2019s been enormous, but at the same time, at some point, everything, I think if you look back and you say, Hey, who was part of the Fortune 100 30 years ago that\u2019s still around? It\u2019s like nobody. It\u2019s like these companies, or 40 years ago, they all roll over at some point. So diversification and kind of continually rebalancing is an important part of this exercise as well.<\/p>\n

David Bach (40:54<\/a>):<\/strong><\/p>\n

Completely 100% agree with you. Rebalancing should almost be automated, but people, everyone gets brave when the markets go up. Markets are up now for three years. I mean, we\u2019ve actually had an unbelievable 20 year run. Since I wrote the automatic millionaire, the markets have gone up 600% and the real estate markets have gone up 400%. That\u2019s average, right? So like in the Bay Area, home prices didn\u2019t go up 400%. They went up way more than 400% in 20 years. So if you\u2019ve been using your 401 plan, investing automatically and you bought a house, you\u2019re a multimillionaire probably and certainly a millionaire. So part of building wealth, you got to build it and you got to enjoy it, but you also have to protect it. 100%. And I think doing the plan\u2019s a big part of that.<\/p>\n

Steve Chen (41:41<\/a>):<\/strong><\/p>\n

I want to shift gears to the last topic really quick and just kind of talk about the future. I mean, let\u2019s open with \u2026 So if I zoom way out and you just think about the history of humans and like what we\u2019ve accomplished, we have accomplished a lot in the last 150 years and it does feel like it\u2019s really accelerating. And people look at like, so next year, 2026 or this year, right? I think a lot of people are thinking famous last words, they\u2019re pretty bullish. They\u2019re like, okay, inflation seems like it\u2019s leveling out a bit. AI is here. It feels like it\u2019s impacting things. It does feel to me like this continues being in tech and especially in Silicon Valley, it just feels like it\u2019s always accelerating. And so it does make you bullish about the future that, hey, and the market is a great place to capture those returns.<\/p>\n

(42:35<\/a>):<\/p>\n

So that\u2019s the upside. And then the other side is, well, nothing goes up forever. You\u2019re going to have these lumps and whatnot. And do you have a perspective on how you think the economy should unrolls here over the next five years, 10 years?<\/p>\n

David Bach (42:49<\/a>):<\/strong><\/p>\n

See, that\u2019s really the interesting question, right? Because I don\u2019t know what the economy\u2019s going to do in the next 12 months. And I think there\u2019s been a lot of great quotes about the fact that if you believe anybody who tells you to know what\u2019s going to happen the next 12 months, then you\u2019ve believed an idiot. I was reading there\u2019s 700 \u2026 I\u2019m on Bloomberg and there\u2019s an analysis of 720 economists and chief investment officers of all the financial service companies. You can go on Bloomberg and you can read this. And the consensus among them, it doesn\u2019t even matter what the consensus is, but the fact that the consensus is all the same. I literally read hundreds of these. I\u2019m like, where\u2019s the guy that doesn\u2019t think it\u2019s going to be okay? So the consensus tends to be almost always wrong. They just say the same thing.<\/p>\n

(43:34<\/a>):<\/p>\n

I don\u2019t know what\u2019s going to happen this year. I don\u2019t know. I mean, I don\u2019t. Nobody knows. Did you know we were going to go onto Venezuela? Do you know what China\u2019s going to do with Taiwan? I have no idea. We didn\u2019t know COVID was coming. All I know is if you ask me what the next 10 years are going to look like, what I think is going to happen next 10 years,<\/p>\n

(43:51<\/a>):<\/p>\n

I think the next 10 years is going to be the greatest opportunity to build wealth in our lifetime, like nothing we\u2019ve ever seen before because AI is changing everything and it\u2019s going to create enormous levels of productivity and profitability. Now there will be economic consequences to all this. There will be people who lose jobs, a lot of people. The world\u2019s going to look very different, but I\u2019m personally very optimistic about where things head in the next 10 years. It doesn\u2019t mean I\u2019m not \u2026 There aren\u2019t things I worry about. If we were to sit down and have coffee and you\u2019re like, \u201cWhat do you worry about? \u201d I\u2019m like, \u201cI think our deficit\u2019s a serious problem. I think our country\u2019s got $38 trillion and that\u2019s actually underestimated how big our deficit is. \u201d I think the fact that GDP, the interest on our debt is greater than GDP, that\u2019s frightening.<\/p>\n

(44:43<\/a>):<\/p>\n

I think our entitlement programs that are getting ready to buckle. I think California\u2019s got all kinds of issues, but these are things that we can\u2019t control. X, Y, I always go back to the only economy that really matters is the one that you\u2019ve developed for yourself and your family. So that\u2019s the economy that you can control.<\/p>\n

Steve Chen (45:01<\/a>):<\/strong><\/p>\n

What do you think people can \u2026 Well, in the age of AI, so we agree planning is important, literacy\u2019s important, right? Automating money is important. How do you see AI affecting financial services? How do you think it\u2019s going to be very different in five years and in what timeframe as well? I\u2019d be curious your take on that.<\/p>\n

David Bach (45:23<\/a>):<\/strong><\/p>\n

You almost have to go back 10 years to think about how much has things already changed. I\u2019ll give you perspective here. I had a Blackberry, I had the AOL Blackberry, the actual pager, right? Do you remember the page? I don\u2019t think most people listening \u2026 You have to be our age to remember what that was, but in order to have an email, you had to have a Blackberry and now you had to have AOL.<\/p>\n

(45:48<\/a>):<\/p>\n

When I worked at Morgan Stanley and I was using that Blackberry, we got a memo telling us that we were never going to have email in the office. I wish I kept that memo because the memo is we\u2019re never going to use email because email, you can\u2019t compliance approve it and it\u2019s not necessary. So think about how much things have changed. You used to, as a financial advisor, have to have a nice office because people come to your office. The people don\u2019t come to your office. I have a financial advisor using Kansas. I\u2019ve never been to his office.<\/p>\n

(46:22<\/a>):<\/p>\n

The whole thing\u2019s been done over Zoom. You and I are not in a studio together. We\u2019re doing this over a Zoom system. We\u2019re doing it on Zencastr right now. So everything has changed. So financial planning, you go in, you meet with an advisor, they run your numbers, they create the plan. Now plans are designed where you can start to use them yourself. AI is going to mean that you can talk to the phone or talk to the screen and you can just tell it and then it can come back and spit back all information. In five years, the question is, will people still sit down with an advisor and want the plan? They want somebody to talk to? That will be the question. I think the answer is yes. I think in financial planning services, there will be more need for help, not less because of what you said earlier, which is we have so many people hitting age 65.<\/p>\n

(47:15<\/a>):<\/p>\n

And the truth is as you get older, your financial life becomes way more complicated for so many reasons. And then you start to have death and then you have to deal with all that. And you\u2019re not going to just go to your phone and be like, \u201cOkay, my husband\u2019s died. No, switch everything over.\u201d The system\u2019s still set up to bring in a death certificate, repaper everything. You got to find all the assets, transfer the assets, pay the taxes, settle the estate. I don\u2019t know that that friction completely goes away in the next 10 years. I think that will still require people to help you.<\/p>\n

Steve Chen (47:52<\/a>):<\/strong><\/p>\n

I agree that I don\u2019t think human advisors and coaches are going anywhere. I do think they\u2019re going to have to get more productive, but there\u2019s also just this huge demand for people to do better. And it is way more complicated. Accumulation is relatively simple. It\u2019s simple, but not easy. Decumulation isn\u2019t simple and there\u2019s a lot of moving parts. And as you have resources, a lot of our folks are super interested in tax efficiency, lifetime income. And not even tax efficiency in just their lives. It\u2019s like a lot of our customers, our users are now like intergenerational planning. You\u2019re probably doing this with your kids. It\u2019s like, okay, get them in a Roth, maybe get your own assets on a Roth so they can go figure out the estate limitations and stuff like that. It really matters a lot for a lot of these folks.<\/p>\n

David Bach (48:37<\/a>):<\/strong><\/p>\n

Well, I\u2019ll tell you, I also tell young people, financial service industry is a great industry to go into. I don\u2019t think AI takes this industry away. I think the AI makes this industry better and more productive, allows you to help people more intentionally and easier than before.<\/p>\n

Steve Chen (48:55<\/a>):<\/strong><\/p>\n

For sure. How are you using \u2026 Well, I saw you did Notebook LM to kind of compile all your thoughts about your IRA flat tax idea. Are you using AI in other ways in your life? I<\/p>\n

David Bach (49:06<\/a>):<\/strong><\/p>\n

Am, but if you think about what we did with the IRA flat tax concept, I\u2019ve had this idea for five years. The amount of money I would have had to spend to hire a consulting firm to put together this white paper and create this thesis for me that we could beta test would have been millions of dollars. Would have taken at least six months to a year worth of consultants working on that. I was able to hire one AI consultant and work on this with her and then run this through all the different AI engines, have them compete against each other because they don\u2019t all agree. And when you use AI, that\u2019s really interesting too, right? Because what ChatGPT thinks versus what Gemini thinks versus perplexity versus a international language model, they\u2019re programmed by people. And then you also have to know, like I learned, because I know, you have to know what\u2019s good data and bad data, right?<\/p>\n

(50:04<\/a>):<\/p>\n

You can\u2019t just look at anything that comes back from a language model and assume it\u2019s correct<\/p>\n

(50:10<\/a>):<\/p>\n

Because it would show me things that I would know were wrong and I go, \u201cWell, that can\u2019t be. \u201d And I\u2019d ask it. And then they go, \u201cOh, you\u2019re right. That isn\u2019t correct.\u201d So it was an interesting process to go through, I\u2019m sure a year from now, if we run this all over again, it\u2019ll be better. We\u2019re in the beginning stages of using language models. Google Notebook LM, if you don\u2019t know what a Google Notebook LM is, and I didn\u2019t until I did this project, it is unbelievable. And if you go to irraflattax.com and then you read the white paper and you click into Google Notebook LM, we just took pieces of the Notebook LM and made it available because I wanted to simplify it. But for example, there are podcasts that I didn\u2019t create that engine created. It read all the white papers and then it\u2019s got podcasts of people talking back and forth, having a show that sounds just like a real show, so well thought through, so well discussed, and that\u2019s just an AI engine.<\/p>\n

(51:09<\/a>):<\/p>\n

That\u2019s unbelievable.<\/p>\n

Steve Chen (51:11<\/a>):<\/strong><\/p>\n

It is incredible. I mean, a couple things with us. So we\u2019ve been using AI to support our audience, our community. We have about 120,000 users a month, 5,000 people ask questions. And in the beginning of 2025, in the beginning of 2025, we had mostly humans and some AI and AI was \u2026 And then in kind of Q1, we turned this on and it started answering half the questions and getting them half right. But at the end of 2025, it\u2019s answering 90% of the questions and 90% of it humans are like, \u201cThis is a better answer. It\u2019s twenty four seven.\u201d We just turned on an AI assistant in our platform.This is in beta less than 24 hours ago. We\u2019ve already had 2000 people engage with it and ask questions. This is not announced. It\u2019s just stealthily out there and they\u2019re able to kind of chat with their plans.<\/p>\n

(51:58<\/a>):<\/p>\n

It\u2019s pretty incredible to watch what people are doing. And the last thing I\u2019ll say is this, there\u2019s a platform called Delphi, which lets you build a mirror of yourself. I don\u2019t know if you\u2019ve ever heard of this, but it\u2019s like I uploaded all of our help, a bunch of podcasts, a bunch of our writing on our website and trained it, and you can call a version of me up and just ask questions. It\u2019s crazy. And I did this in three hours on last Friday as just like, \u201cWhat\u2019s going to happen?\u201d And it\u2019s 350 bucks a month. I mean, it\u2019s just total experiment.<\/p>\n

David Bach (52:32<\/a>):<\/strong><\/p>\n

Okay. Yeah. Send me a link. I\u2019ll check it out because I talked to the founder of Delphi a couple years ago and then we didn\u2019t go down that road of doing it, but maybe now is the time to do it.<\/p>\n

Steve Chen (52:40<\/a>):<\/strong><\/p>\n

Well, we\u2019ll see if it \u2026 Yeah.<\/p>\n

David Bach (52:42<\/a>):<\/strong><\/p>\n

Your software system, is it for retail clients or for advisors who work with retail clients or both?<\/p>\n

Steve Chen (52:48<\/a>):<\/strong><\/p>\n

So think of us like TurboTax of planning. We basically are the first company \u2026 I started this company because I was helping my mom figure this out. She was approaching retirement, didn\u2019t have that much money, like less than half a million bucks aging female and just couldn\u2019t get the time of day from an advisor. She needed to kind of make some decisions and figure out retirement.<\/p>\n

(53:08<\/a>):<\/p>\n

She needed help. And so my brother and I, and we both had some financial service experience. We\u2019re like, \u201cOkay, I guess we\u2019re doing this ourselves.\u201d We started building spreadsheets and then we just discovered that there\u2019s 120 million people in this country over age 50. They have 80% of the money. Everybody\u2019s worried about it like you\u2019ve experienced and learned and nobody knows what to do. And that\u2019s pretty much, I feel like still the case. And so we\u2019re like, all right, let\u2019s \u2026 I\u2019d built software before, SaaS, so we\u2019re like, let\u2019s turn this into a company. And then we\u2019ve \u2026 First it was Bootstrap, now our venture back company. We have a bunch of subscribers. We have 65,000 ish subscribers now. They\u2019re managing $200 billion.<\/p>\n

David Bach (53:49<\/a>):<\/strong><\/p>\n

Wow.<\/p>\n

Steve Chen (53:51<\/a>):<\/strong><\/p>\n

We\u2019re like creative planning, except that people are doing it on software. I\u2019ll send you the link. You just check it out. You see what we\u2019re up to.<\/p>\n

David Bach (53:58<\/a>):<\/strong><\/p>\n

Yeah, send me the link. I\u2019ll totally check it out. I love Pillow to play with it. Congratulations.<\/p>\n

Steve Chen (54:02<\/a>):<\/strong><\/p>\n

Well, hey, we\u2019re early. It\u2019d be great to have seven million users. You\u2019ve had seven million people buy your books.<\/p>\n

David Bach (54:09<\/a>):<\/strong><\/p>\n

What were you doing back in 2017 when we met at Fincon?<\/p>\n

Steve Chen (54:14<\/a>):<\/strong><\/p>\n

I was getting into this space. I\u2019ve always worked on financial services. I was learning about FHIR. We were early running \u2026 We were playing around with different \u2026 In my career, I came out, I was a consultant. I used to actually wrote software at Schwab in the beginning, early days, and then other places, Wells Fargo, Fidelity and places like that. And then did a startup in the dotcom glory days, raised 40 million venture capital file to go public way back when I was like early 20s or mid late 20s and also didn\u2019t go public and so saw that whole part of it. And I\u2019ve done various things. But I think this idea is now become my life\u2019s work in terms of really trying to be completely aligned with the end user, transparent, equip them with literacy, technology, find super smart people like yourself to kind of share their stories and just build a community around it.<\/p>\n

(55:02<\/a>):<\/p>\n

So that\u2019s what\u2019s happening.<\/p>\n

David Bach (55:04<\/a>):<\/strong><\/p>\n

Good for you. Well, I\u2019d love to check it out. I\u2019m glad. I think we got connected from somebody else who I did a podcast with. And I\u2019m thrilled that I said yes to you because it\u2019s been really fun meeting you. And this has been a super enjoyable conversation. So I hope it helps, I don\u2019t know, your community. And obviously you have a very engaged community. If you\u2019ve got 60,000 subscribers on software, I don\u2019t know if software\u2019s the right word anymore for this, but using a financial planning tool, they\u2019re already in the small percentage of Americans. And so part of it\u2019s like, don\u2019t keep it a secret, right? For anybody who\u2019s using this stuff, don\u2019t keep them a secret. Go tell your friends, get more people doing this because more people need help.<\/p>\n

Steve Chen (55:45<\/a>):<\/strong><\/p>\n

100%. Well, look, yeah, David, I really appreciate you making the time. And we\u2019ll definitely point people to davidbach.com and the Flat Tax IRA Flat Tax website. Any last resources that you want to suggest for our audience that you think will help them?<\/p>\n

David Bach (56:01<\/a>):<\/strong><\/p>\n

First of all, I\u2019ve got a podcast too, the David Boch Show. So if you want to listen to the first three chapters of the book, actually there\u2019s probably four chapters now available online for free, davidboch.com. Go check out the podcast and the show\u2019s called the David Boch Show. So they can go listen to something out and get your hands on the automatic millionaire book.\u00a0<\/p>\n

David Bach (56:22<\/a>):<\/strong><\/p>\n

I appreciate everything being a part of this. I\u2019ll look forward to checking out your thing too. Send it to me. I\u2019ll play with it and then come back to you.<\/p>\n

Steve Chen (56:28<\/a>):<\/strong><\/p>\n

For sure. All right. Well, David, really appreciate it. And for all the folks listening, thanks for your time and hopefully you found this thing helpful and we\u2019ll see you on the next episode of Boldin Your Money podcast. I loveIt. Happy Skiing.\u00a0<\/p>\n

David Bach (56:37<\/a>):<\/strong><\/p>\n

High five.<\/p>\n

Steve Chen (56:38<\/a>):<\/strong><\/p>\n

High five.<\/p>\n<\/p>\n<\/p>\n

The post Podcast 106: The Automatic Millionaire in an Automated World with David Bach appeared first on Boldin.<\/p>\n