Bach, author of The Automatic Millionairerecently appeared on The Diary of a CEO podcast to discuss the habits of the rich. He highlighted recent statistics from the Fidelity Investments shows that there are now about 654,000”401(k) millionaire” in the United States, meaning that their wealth is derived entirely from their retirement account, usually quite conservatively invested. The Wall Street Journal they are called frugal and wealthy investors”average millionaires,” and they bear a strong resemblance to UBS’ “everyday millionaire.”

When analyzing how these ordinary employees amassed such fortunes, a clear pattern emerged. They don’t sell meme stocks or time the market. Instead, they always save and follow a specific investment mix: roughly 70% in stocks for growth and 30% in bonds for stability.

“The exact formula they save (is) 14% of their gross income … and how they invest the money is the key,” Bach explained. “You have to invest for growth and growth means stocks”.

Boring is beautiful

The 70/30 split is the opposite of the high-risk strategies often marketed to young investors today. Bach argues that “sexy is how you go broke,” while “boring is beautiful” when it comes to building long-term wealth. A 70% allocation to stocks allows for significant appreciation over decades, while a 30% allocation to bonds provides a cushion against volatility. This balance helps investors “stay the course” during market pullbacks, preventing panic selling that destroys returns.

Bach notes that successful investors often use index funds to achieve this exposure, such as Vanguard Total Stock Market Fund (VTI) or the NASDAQ 100 (QQQ), rather than selecting individual winners. The goal is not to beat the market every day, but to allow the “miracle of compound interest” to work for decades.

However, the 70/30 rule is only half the equation. The mechanism that really drives wealth creation, according to Bach, is automation. He emphasized that the main difference between the rich and the living wage earners is not necessarily income, but the existence of a system that “pays yourself first”.

“Unless your financial plan is automated, it will fail,” warns Bach. He points out that seven out of 10 Americans are now living paycheck to paycheck, mostly because they try to save what’s left at the end of the month—which is usually nothing. “Automatic millionaires” set their deductions to occur once they get paid, ensuring that 12.5% ​​to 14% of their income goes directly into their 70/30 investment portfolio before they spend it.

Think about whether you want that sandwich or drink

For those who feel they can’t afford to invest, Bach offers a sobering calculation. He asked the audience how much money they would need to spend every day to blow $10,000 a year. The answer is $27.40, like a very expensive sandwich or a few drinks after work. Conversely, investing the same $27.40 a day in the market for 40 years can grow to over $4.4 million, if there is a 10% annual return.

While the 70/30 rule drives growth, the discipline to know that daily capital is essential. “We will see the growth of 8 million millionaires to 24 million millionaires in the US in just 20 years,” said Bach, who attributed this increase in wealth to two main escalators: stocks and real estate. As the world economy faces potential changes due to AI, Bach said he believes the next decade represents “the greatest wealth-building opportunity of our lifetime.”

Certainly, the assumption that constant compounding for 30 or 40 years will yield predictable wealth is highly dependent on the future stability of the economy, and is a luxury available to American investors in a way that it does not exist in a country like, say, Argentina. And with ongoing geopolitical tensions, climate costs, and the rapid impact of artificial intelligence on labor markets, the next few decades may look less reliable than the last 50. America’s $38.6 trillion national debt and doubts about the longevity of the dollar as the world’s dominant reserve currency serve as growing evidence that the 22nd century will be very different from what the 22nd century was shaping up to be.

Gen Z seems to be actively ignoring Bach’s advice. Although it is true that Americans in the roughly 15-year-old generation reaching up to 28 years of age are investing earlier than previous generations, they show a higher inclination towards risky and non-traditional assets, heavy use of fintech and social media, and relatively weak retirement preparation. Surveys show crypto is incredibly prominent for Gen Z adults, who have 44%–55% starting with or primarily using cryptowhile 32%–41% hold individual stocks and about one-third use mutual funds or ETFs. Alternatives (crypto, private market, and real estate style) make up about 31% of the portfolios of young investors in a Bank of America analysis, compared to about 6% for older investors.