Deconstructing David Bach

This week, Money360 is deconstructing five top personal finance and investing pundits and asking the big questions about their track record and their message.

David BachDavid Bach was the first personal finance guru that I became familiar with due to media appearances, as I saw him pop up several times on The Oprah Winfrey Show and The View during a period of time when I found myself home a lot in the mornings during my final year in college. He struck me as being quite sensible, but I largely forgot about him until I started paying more attention to my finances, at which point I picked up a few of his books to read. Did my opinion stay the same?

Background
Like many personal finance gurus, Bach started off at an investment firm – in his case, as a senior vice president at Morgan Stanley and later a partner in The Bach Group, where he managed funds for individual investors. Once The Bach Group began to see success, he began to take on media appearances and started writing books and columns, and he eventually left The Bach Group in 2001 to focus on his media career by founding FinishRich Media, which largely manages seminars, media appearances, and writing for Bach.

Of the individuals I looked at this week, only Jim Cramer and Suze Orman have anything close to David’s background in managing people’s money effectively; his background seems to clearly be the strongest among the gurus I’ve reviewed (though I’d imagine some fans of Cramer would be willing to argue the point).

Message
Bach’s message has actually changed somewhat over the years, and that’s the biggest trouble I have with him. His earlier books (for example, Smart Couples Finish Rich) are quite strong, focusing on a lot of different aspects of personal finance. Much of it was typical – save money, pay off debts, etc. – but where Bach really hooked me was his focus on the importance of interpersonal relationships in personal finance management. Bach made a very clear multidimensional picture of the realities of personal finance, yet managed to also break things down into simpler pieces that people could digest.

Then he took that simplification to a whole new level. His more recent books (like The Automatic Millionaire) abandon the well rounded nature of his earlier works and instead focus on dumbing down personal finance to a comical level. In making a strong effort to make personal finance management as easy as possible, he takes it too far: personal finance problems aren’t solved by just automatically deducting money and living by “the latte factor.”

For me, I enjoyed his earlier books, but his later books suffer greatly because he’s trying way too hard to reach a broader audience that wants it all to be very easy to do. Successful personal finance isn’t easy; it’s something that requires reflection and internal commitment. A string of simple cost-cutting measures and an automatic deduction from your paycheck are not enough to get your finances in shape, though they certainly help.

My Take
I think Bach found some success with his earlier message, but went way too far in trying to reach a wider audience, destroying his message in the process. Early on, Bach was clear that you needed to work at it and that interpersonal relationships were an integral part of the equation. You could actually turn to his books for rational advice, not just “fix the problem quick” solutions that were Band-Aids.

At some point, though, I feel like David Bach lost respect for his audience. He started to focus more on Band-Aid solutions rather than actually addressing the deeper problems, and eventually reached the point where he preached a gospel of just cutting back on expenses and automatically deducting money from your paycheck. That perspective is almost painfully one-dimensional and, even more, that message lacks the power to really change people’s lives. It’s just a quick fix to a much deeper problem, and it’s incredibly disappointing compared to his original message.

The bottom line: David Bach used to provide good financial advice, but has dumbed down his message to the point where it no longer helps people solve their financial problems.