Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity, By Garrett B. Gunderson with Stephen Palmer
Brief Overview
A “sacred cow” is a term used to describe a commonly held, respected belief or idea. There’s a whole lot of mooing going on in Gunderson’s book because he mercilessly kills many heifers. He debunks 9 financial commandments that most experts espouse. The book explains, in-depth and with many examples, why you, too, should change your financial beliefs and habits.
Here are the 9 myths Gunderson and Palmer propose:
- The Finite Pie. This is the scarcity mindset that many adhere to; if I get a bigger piece of the pie you must get a smaller one.
- You’re in it for the long haul. This myth is a staple in America’s psyche. Save a portion of your income, preferably as soon as you start working, and the magic of compound interest will make you wealthy at retirement.
- It’s All About the Numbers. Watching your net worth and investment stats is not the correct way to measure wealth.
- Financial Security. Your 401k and salaried corporate job do not deliver true financial security. Rather, your ability to create value, which translates to ongoing compensation, is a better barometer.
- Money is Power. Money is simply an exchange of value. The mighty dollar in and of itself does not have any intrinsic value.
- High Risks, High Returns. This is not the way banks make money and neither should you.
- Self-Insurance. Gunderson believes that self-insurance means that you don’t have any insurance. He is an advocate of getting a lot of good insurance.
- Avoid Debt Like the Plague. I would love to watch Garrett Gunderson and Dave Ramsey duke it out on this topic! Gunderson is in favor of “good” debt.
- A Penny Saved is a Penny Earned. You must look at value, not dollars, when deciding on investments and spending.
Favorite Quote from the Book
“Applied human life value is the source of all money, prosperity and progress.”
This is the essence of all of the ideas in the book. You must find your “soul purpose” in life and exercise it. That is the way to achieve both happiness and success, as well as make the world a better place.
Should I Read it?
If you have the time Killing Sacred Cows is definitely worth a read. It’s not tiny, but it’s also not a tome (253 pages). Some of the chapters make their point very clearly in the first few pages and didn’t need to continue. They are a tad redundant.
However, Gunderson is methodical in stating his case and uses examples throughout. There is enough detail to allow analysis and introspection on the topic.
If you have other priorities right now, give the expanded summary below a read.
Comprehensive Summary
Each chapter of this book (except the first and last) is a particular myth that Gunderson wants to “kill”. In the brief overview, I’ve listed each. Here I will justify each myth with the evidence presented in the book.
MYTH NUMBER 1: The Finite Pie.
Common Myth: Economics and finance are all about scarcity. That’s how it’s taught in high school economics. There is a finite amount of resources, money, customers, etc. A simple extrapolation from that idea is: I need to steal customers from someone else, or if I get the promotion another does not. It’s a zero-sum game.
That seems perfectly accurate and logical on its face.
Nope.
Money and profits are not finite. They can multiply. Money is simply an exchange of value. If I give you something you want or need, you give me money in return.
“But, Joan,” you say — “That’s exactly the point. If I give you $100 that means I can’t spend it somewhere else.”
Yes and no. Human productivity is dynamic, it changes. And human productivity is what creates more value. If the average human increases how much they produce in an hour more wealth is created. If society as a whole creates more value then by definition we have created a bigger pie.
Let’s say I have a wholesale bagel shop and sell to food markets. I have 6 employees making, on average, 100 bagels an hour. What would happen if one of those employees devises a way to make the bagels twice as fast? Or I purchased an oven that cooked them 3 times faster?
My bagels shop, As a Hole, can sell double or triple the bagels at the same price greatly increasing profits. Wealth has been created. If I share that new wealth with my 6 employees we all enjoy more money and buying power.
The bagel place down the street does not have to go out of business either. They, too can thrive using their unique human value. My company innovated to increase productivity. Perhaps this one makes heart-shaped bagels during the Valentine season, and Christmas tree-shaped ones during Christmas.
Their human value is artistic creativity. They will also flourish.
MYTH #2: You’re in it for the long haul.
This myth is a staple in America’s psyche. Save a portion of your income, preferably as soon as you start working, and the magic of compound interest will make you wealthy at retirement.
Obviously saving young and continuously over 30 years will yield impressive returns when you’re 65. But it’s definitely the long game. Compound interest numbers don’t look impressive in the first 10 or even 15 years.
CHART
Gunderson argues that is it far better to have self-value in every stage of life instead of saving over the long term. Human life values are the skills, knowledge, relationships and abilities that you have and others want and need.
Invest your money in yourself. This will ensure that you are always creating cash flow and wealth. The more you invest in yourself, the greater your human life value will grow.
If you’re focused on the accumulation of wealth you will not be focused on increasing your productivity and utility. You should seek value creation now over deferring life goals to the future.
Gunderson contends that growing assets, such as a business or real estate, is a far better way to achieve financial security and happiness throughout your life than a 401k.
MYTH #3: It’s All About the Numbers.
This myth states that your account balance is the place to focus your energy. The reality is that you should be focused on doing what you love and wealth is inevitable.
This myth is destructive because attention is on the accumulation of money, which is the effect, rather than human life value, which is the cause. It overvalues finances and undervalues people.
How many people stay in a job they hate because of the “benefits”? These people don’t weigh the opportunity costs of such decisions.
Another problem with numbers is that they include assumptions and variables. If you save 12% of your income and average a 6% return over 30 years it will result in a given money value. However, your income will change over your life, your circumstances (marriage, children, illness, etc.) will vary, and the stock market will have ups and downs — sometimes for years.
This concept is covered throughout another book I’ve read, Die with Zero by Bill Perkins.
If you had a million dollars would that bring you happiness? How? What would it buy? A house? A nicer car? A couple of vacations every year? What are the life experiences that you actually desire? This is where you should focus your attention.
By striving for what makes you happy and building your human value life can be fulfilling now AND later.
MYTH #4: Financial Security.
The lie is that financial security means a good, steady job. The only true security you have is relying on yourself to ensure wealth.
This myth is becoming more widely understood in the 21st century. Nobody goes to college, gets a corporate job for 40 years then retires with a gold watch and a pension anymore. Even civil service jobs are often at risk in the modern economy.
If you’re an accountant you could snag a job at one of the “Big 8” accounting firms and work 70 hour weeks in an attempt to make partner at some unforeseen future.
Or you could hang out your own shingle and buy the building where your office is located.
Which decision gives you better control, options and potential? And satisfaction.
Many people spend their work lives trying to see what they can get from other people. Who will pay me the highest salary? How much of a raise can I negotiate? Where can I work for the least hours at the best pay?
Focus on what you can give, rather than what you can get and abundance will be a natural outcome. This goes back to the scarcity mindset: if I get a piece of pie, you don’t.
What if I create a better pie? A crispy, cheesy fabulous pie using only fresh ingredients? Others will derive great pleasure in every bite. And pay me a premium for a superior product.
The word gets out. You’ve got to try Joan’s pizza. People come from the next town over to check it out. I have to hire help and eventually open other locations. And I’m having a great time feeding my fellow man.
Okay, so I haven’t started a pizza parlor yet, but you get the idea. I do really love a good slice and am happy to pay more for it. This is just one example of an abundance mindset rather than one of scarcity.
“But, Joan, what about the pizza guy across the street that you put out of business?” That didn’t happen. I charge a premium for my pizza and many people will still choose to save money and go across the street. However, I have enticed people who don’t often eat pizza — because of my farm-fresh ingredients — to start eating it. So the original “pie” has grown and expanded.
MYTH #5: Money is Power.
I am definitely guilty of having made this statement. Gunderson kills this sacred cow by explaining money is simply a byproduct of value created by people. Therefore, it is human talent and knowledge that is the true power.
Oftentimes this myth extends to mean “money is the root of all evil”. Power is perceived to be used for negative, self-serving outcomes. According to Gunderson, if you discredit money you are belittling the talents, efforts and creative endeavors of others.
If money were power you could bestow lots of it to many people and they would have power, knowledge and access to resources. Yet most of us have read that many lottery winners are broke within 3-5 years. Fully 70% of large winners are bankrupt within 5 years.
So it is not money that is power; it’s the ability to serve others. By solving problems for your fellow man you will naturally be compensated. The more value you create the larger your purse will grow.
Also, it doesn’t take money to make money. It takes human value, skills and service to make money.
However, this sounds to me a lot like exchanging dollars for hours, which isn’t a straight path to wealth. If your skill is website design, or playing the piano, or teaching calculus in a way that people understand, your wealth creation is limited to the amount of time spent on the endeavor.
Gunderson does touch on this issue in one of his supplemental resources. He admits that not every soul purpose will lead to a lot of money. But he contends that’s not the point. True wealth is achieved by doing what you love and enough money will flow from that endeavor to make you at least comfortable.
MYTH #6: High Risks, High Returns.
This myth is perpetuated by financial institutions. Stock brokerages, banks and insurance companies espouse this idea. But, if you look at what they do, not what they say, a different story emerges.
Banks make their money using other people’s money and loaning it to credit-worthy borrowers. It works very well for them; they thrive with very low risk. Insurance companies use careful research and actuarial tables to ensure that your premium nets them a hefty return.
So why don’t we do what they do, not what they say? Because the “experts” have told us otherwise. Over and over and over again.
Once again, the book reminds us that we should invest our money in ourselves. You want to increase your human life value through books, courses, degrees, mentors — anything that better enables you to serve others.
That is how you grow and control your own wealth.
Lower Your Risk
According to Gunderson, no investment is inherently safe or risky; it depends on your knowledge. Warren Buffet has explained that he never invests in an industry he does not understand.
Without knowing the mechanics of a business you cannot assess the risk. Stick to what you know. Do not listen to your brother-in-law who just got a great tip on a stock.
MYTH #7: Self-Insurance.
Self-insurance is no insurance, says Killing Sacred Cows. Here’s why:
If you have money set aside in case of emergency — your car blows up or you become disabled — that’s money you could be using and growing instead. Also, being underinsured creates stress that detracts from — you guessed it — your soul life purpose.
Gunderson is a strong advocate of investing in lots of insurance. He spends a great deal of time analyzing why whole life insurance is better than term life, which is counterintuitive to most. After all, term life insurance is much cheaper.
Yet he explains that buying whole life insurance at a young age is the way to go. It accrues value over time that you can borrow from if need be. Term life insurance does not have that benefit. You will have peace of mind, knowing that your loved ones are covered should anything happen to you.
MYTH #8: Avoid Debt Like the Plague.
This is another area Gunderson would duke it out with Dave Ramsey over. Ramsey (and others) are adamant that debt-free is worry-free and a goal to strive for. Always.
One point that’s discussed is the difference between debt and liability. Debt is money borrowed for a particular purpose. Liabilities are expenses we incur, many of which include debt (mortgages, car loans, etc.) True debt is having more liabilities than assets. That’s not good.
Incurring debt that will produce more assets is desirable. If you take out a mortgage on a 2-family house that will net you positive cash flow, that’s a good use of debt. Debt for consumptive purposes is bad.
There are 3 types of spending — or as Gunderson prefers to call it — liabilities. Productive liabilities increase your cash flow now or in the future. Examples would include mortgages and student loans.
Consumptive Liabilities cost more than their increase in cash flow. Sometimes these purchases will indirectly help productivity (car, furniture, suits).
Lastly, destructive liabilities are to be avoided. These destroy human life value (drugs, gambling, excessive junk food)
MYTH #9: A Penny Saved is a Penny Earned.
This is the myth that you should spend as little as possible. And if you MUST buy stuff wait for a sale.
Price is a factor to be considered when purchasing, but only one, and not the first. Consider the value of a product. Is it quality? How long will it last? Why do I want it? How will it affect my life?
Both spenders and savers are obsessed with price. Spenders love a good sale. Think about Black Friday; hundreds of thousands of people get up at 3:00 a.m. to fill their shopping carts with stuff.
Have you ever bought a piece of clothing you didn’t love because it was a “steal”?
Savers lower the quality of their lives to save a few pennies. Everyone knows that guy who won’t put the air conditioner on in his car because it uses gas even when it’s 95 degrees outside.
I remember going to a friend’s house one day as a teen. Her mother and aunt were sitting at the table eating grapes. I noticed as they ate they were making often pursing their lips and making funny faces.
“Is something wrong with the grapes?”
“They’re very sour.”
“So why are you eating them?”
“We can’t waste food!”
It was inconceivable that they would throw out a few sour grapes and instead enjoy a snack that tasted good!
A mindset shift is in order for many folks. Consider value before price. And rather than saying, “I can’t afford it” the inner dialogue should be, “How can I afford it?” This is a line from Rich Dad Poor Dad that is quoted in Killing Sacred Cows.
“How can I create more value in the world that will bring me more wealth and the ability to afford what I want?”
Defeating the Myths: the Formula
The last chapter of the book is a message from the authors that the 9 myths addressed are not the only ones. They chose 9 of the — in their opinion — most common and destructive. The purpose of the book is to get you to question edicts when you encounter them.Your first mission is to reflect and decide who you are. What are your values and priorities? What is your soul purpose? Until you know what kind of path you want to travel in life it’s hard to make sound decisions.
This chapter also gives you an overview of what questions to ask in order to find your soul purpose:
> What are your skills and passions?
> What would you do even if you didn’t get paid for it?
> What do people compliment you for?
> What does your perfect day look like?
>Who do you know and admire? How have they built their life?
With your soul purpose identified you can ask better questions about money. Does this advice serve me and my goals? What are the opportunity costs?
Most people are constrained by deeply held myths. They are perpetrated by institutions that gain from these myths. It is difficult to rewire your brain to think and act differently.
“They are sacred cows that, upon scrutiny, prove to be false illusions that distort our thoughts and decisions about money and prosperity.”
Difficult as it may be, in order to live in your greatness, these myths MUST be defeated.
Points to Ponder
This book is FULL of points to ponder. Each chapter caused me to stop, flip back through it and evaluate. I was forced to analyze my prior beliefs and the validity of Gunderson’s. He often transformed my earlier mindsets.
By far the most glaring message in this book is to find your soul purpose; without it everything else is moot. He does not delve into how to actually do this in the book.
However, he does offer extra resources at Wealth Factory, his company. You can go to the Wealth Factory website for a guide here. The guide includes exercises and questions to ask yourself to help you find your soul purpose.
About the Authors
Killing Sacred Cows is co-authored by Garrett B. Gunderson and Stephen Palmer.
Garrett Gunderson is the founder and “chief wealth architect” of Wealth Factory, a company that coaches its members on wealth building. He has a YouTube channel and has been a guest contributor on CNBC and writer for Forbes and Entrepreneur Magazine.
Garrett comes from a 4th generation coal-mining family and was raised in rural Utah. His great-grandfather left Italy in 1913 and lived in a tent while building up his assets for his family.
Stephen Palmer is a ghostwriter, author and purpose coach. He and his wife and children live in southern Utah.
Has the author written other books?
Gunderson’s other book is What Would the Rockefellers Do? How the Wealthy Get and Stay That Way, and How You Can Too. It follows the Rockefellers road to generational wealth and explains how you, too can do the same for your family.
Palmer’s other books include Manifest Destiny: Choosing a Life of Greatness. This is a series of inspirational essays compiled from his weekly newsletter. You’ll get advice on how to life a more extraordinary life.
Uncommon Sense: A Common Citizen’s Guide to Rebuilding America is Palmer’s other book. Thomas Paine, a revolutionary-minded colonist in 1776 published Common Sense. It inspired many with clear and simple arguments in favor of independence to join the revolution.
Palmer, too, wants to spark a revolution in America. In 43 essays he explains that the problems in America are caused by — and the solution lies — with the people. We do this by turning inward. We need to change the prevailing mindset of pointing fingers and looking for someone to blame. Instead, Americans must change their mindset and limiting beliefs.
Conclusion
Killing Sacred Cows is a worthwhile read. It has far more substance than many books in the genre. Oftentimes a financial advice book will have one idea that is “different” and ramble on about it for 300 pages. Killing gives you many points to ponder.
Happy Reading!
Joan Medori