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Debt Free for Life by David Bach

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Debt Free for Life by David BachDebt Free for Life is David Bach’s latest personal finance book and the first, as far as I know, that focuses entirely on the subject of debt.

David Bach’s most well known book is The Automatic Millionaire, which pushed the idea that the easiest way to “get rich” was to put it on autopilot. Automatic savings, whether to a bank account or a retirement account, is the key to a prosperous retirement. It’s one of the powerful pieces of personal finance out there. Since then, he’s written Start Over, Finish Rich which has spawned a whole “FinishRich” line of books, live events, and coaching.

In previous books, it was always about putting together a system that sets you up for the rest of your financial life. Set an automatic monthly contribution to your 401(k), check in each year to rebalance, and retire comfortably (that’s the skeleton, you have to put the meat on it by researching investments, etc.). This is one that focuses entirely on debt, how to pay it down faster, how to get out of it (from legally walking away to working with debt settlement companies), and how to stay away from accumulating more debt in the future.

DOLP Method

The chapter in the book that I think most debtors would find value in is Chapter Five: The DOLP Method: How to Pay Down Your Debt in Record Time and it’s a system that Bach has written about before. DOLP stands for Done On Last Payment and it establishes an entire framework for paying down your debt. You begin by collecting all of your debts to put into your DOLP worksheet. It’s really nothing but a list of accounts, balances, minimum monthly payments, due dates, and two figures called DOLP Number and DOLP Ranking. The DOLP Number is the balance divided by the minimum payment. The ranking is a ranking from smallest DOLP Number to largest. You pay the minimum on everything and then pay as much as you can on the highest ranking DOLP Ranking.

If this sounds a little like Dave Ramsey’s Debt Snowball, you’re close… this is a wrinkle on the idea. Instead of paying the lowest balance, which may have the highest DOLP ranking, you pay the one that can be paid off quickest with respect to minimum payments. A DOLP Number of 10 means you are 10 payments away from paying it off. As you can see, it’s close but not the same.

In summary, I think it’s a good book from an accomplished author and certainly worth a look (Google Books seems to have excerpts you can check out) if you are in debt and can’t figure out how to get out.

{ 11 comments, please add your thoughts now! }

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11 Responses to “Debt Free for Life by David Bach”

  1. SoonerNATX says:

    done on last payment? when else would you be done?

    i havent tried this… but just thinking through this… unless you have a large amount of unsecured debt, wouldnt your mortgage trump everything and unless you have a 1990′s interest rate… wouldnt your unsecured debt have a higher interest rate?
    i realize you will pay more money in interest on your house than you should ever pay on a credit card… but its tax deductable (for right now) so shouldnt the focus be on unsecured debt?
    just my thoughts.

  2. Getting out of debt is certainly the first key to becoming wealthy. My wife and I have a plan to become debt-free by the end of March and we are super excited! Next comes a true emergency fund and a house of our own!

    I make sure to update our progress on my website. This way I am held accountable by my readers! :)

  3. zapeta says:

    Never heard of the DOLP method but I can see the appeal. I never read The Automatic Millionaire, but Start Over, Finish Rich gave me essentially the same advice as every PF blog I’ve ever read so it wasn’t too useful to me.

  4. daenyll says:

    I’m not too sure about any repayment method that does not in some way account for the interest rates in terms of where to apply the pay down first. While the minimum payment amount consideration does make the DOLP slightly more favorable in my eyes than the direct snowball method, I still prefer to look at repayment in terms of what will cost me the least in the long term.

  5. Sounds like something I should research. I’ll compare the 2 plans and see which one works the best for me.

  6. bob says:

    I will never read anything by this author again, He should not be allowed to publish books. He was subsidized by Wells Fargo because his book pushed home ownership and second home ownership, without regard for being able to afford the home/homes. He is not the cause of the housing bubble but a flag bearer for it. And rather an opportunist and a profiteer.

    • Jim says:

      Let’s be honest… everyone pushed home ownership. To say you won’t read anything by David Bach because he was a proponent of home ownership is just foolish.

  7. Bogey says:

    Jim ,

    Several blogs has a link to a free PDF version of this book last week, I believe it was. I browsed through it quickly, and it seemed to be a very basic book, in my opinion.

    I would argue that much better “get out of debt” information could be found on the web for free.

    David Bach has a lot of good ideas that I agree with. But, really, how many personal finance books can you write while still presenting new and fresh information? I think he was 11 or 12 books now.

    Bogey

  8. Sounds great, but where are the books on “how not to stay far away from debt in the first place”?

    • 1up says:

      @MH for Movoto: Most people do not bother to get sound financial advice before they have problems. Buying a book to educate on and to prevent a problem is very rare for most people.


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