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21 December 2008 @ 10:56 am
"Killing Sacred Cows" or, "Portrait of Hubris"  
There's a guy named Garrett B. Gunderson who made a bunch of money in his twenties and made the mistake of thinking he was smart, not lucky.  He wrote a book called "Killing Sacred Cows: Overcoming the Financial Myths that are Destroying your Prosperity", copyright July, 2008, (except his website shows a self-published version he released in April, 2007.)

I'm struck by a few things after reading this book.  One is how incredibly young he is.  This is a book written by someone who has never known a bear market, never seen asset prices plummet.  He just doesn't understand why you wouldn't kill the cow.  I'll tell you why: because the cow will give you a steady stream of milk that can sustain your kids at a subsistence level, whereas killing it will give you a couple of good feast days at most.

This book is all about feasting now.  It's a grasshopper manifesto.

Myth 1: The Finite Pie.  He counsels that people will be richer if they stop acting like resources are scarce and start acting like everything is limitless.  He explains that he went from making $133,000 the year he graduated from college to making $450,000 the next and he did it by cooperating with others and not being all stingy, so scarcity is bad, mmkay.  I wondered if he meant to imply that everyone he cooperated with ALSO made $450,000 that year.  I also found it interesting that he found $133,000 to be a reasonable starting wage for a hard-scrabble new graduate.

Myth 2: You're in it for the Long Haul.  In this chapter he explains that it's silly to live within our means as the road to wealth never comes from reducing expenses, it comes from flaunting it to attract more wealth, and, besides, sometimes people die young so what's the point in saving, as you'll never really use that retirement money anyway.  Oh, and it's selfish and shortsighted to be frugal, as you're keeping the velocity of money down by not spending now.

Myth 3:  It's All About the Numbers.  In this he reveals that money isn't worth anything, the only true value is in how much enjoyment you can get from it now.  He laughs at people who are trying to save up for retirement, explaining that more money won't make them happier and they're likely going to be skewered by higher tax brackets.  Thing is, he completely misses any concept about storing excess labor now while you're young and strong to help support you later, when you're old and decrepit.  He has no concept of "rainy day" in his thinking.

Myth 4: Financial Security.  I tended to agree with a lot of his points about people being responsible for their own financial freedom and security, but he went too far and laughed at Enron retirees for trusting their pension plan was okay.  Even when I agreed with some of his philosophies here (a few paragraphs on page 101), the logic of his sentences is seriously flawed in many places.  Around now I started wondering whether he was a Jehovah's Witness, as he was starting to remind me of a Watchtower publication.  There's a strong evangelical element to his writing that backs that up, although it reminded me of Mormans, too.   Whatever it is, it's rooted in faith rather than reality at a core level.  For example, he makes a distinction between Consumers who rely on things like the SEC (fools!) and Producers who are the "responsible, innovative, and creative people who create all the products and services that we buy and use. They are more concerned with giving than with receiving."  ORLY?  That doesn't exactly describe the people I know making the products and services that *I* buy and use.

Myth 5: Money is Power.  This is a throw-away chapter in which he explains that having money isn't a source of power because anyone can go get as much as they want anytime they want.  Yes, you can be just like John D. Rockefeller just by promoting a really good business plan - people will throw money at you because of your superior soul purpose.  (He completely neglects to consider that your soul purpose might be a poorly compensated activity like feeding the hungry or tending the aged.)  Oh, BTW, money isn't evil, because you can give to nice charities.   This read like he was rebutting his grandmother's chastisements that he was too concerned with money.

Myth 6: High Risk = High Return had a nice section on page 147 on gambling versus investing that I wish more people understood.  But he goes on a few pages later to explain that there is no such thing as a risky investment.  Those ships carrying spices from the Orient - they should have been appropriately hedged.  Done his way, no one ever loses money.  Uh. yeah.  Did I mention that he's REALLY young?  Also, that this was published in 2007?  He made me glad that most of my own stock holdings are in the field of reinsurance.  (His way is still a gamble, but one where the house always gets a good cut either way.)

Myth 7: Self-insurance is a chapter where he explains that you should pay money for all sorts of insurance and hedges so you don't have to keep any money sitting around in savings.  He considers it the job of a clever person to figure out all forms of risk and hedge them.   He considers himself to be clever enough to have foreseen all possible problems he'll face in life.

Myth 8: Avoid Debt Like the Plague.  Instead of having pesky savings sitting around doing nothing, you can leverage all your savings into tons of sub-prime real estate which you will easily be able to flip whenever you get into a cash flow crunch from servicing all that debt.  Do I really need to comment on this advice?  I think I do not.  There is a nice paragraph or two on page 200 about good debt versus bad debt, though.

Myth 9: A Penny Saved Is a Penny Earned explains that we need to live large, buy the most expensive of everything and really seek out value.  There's no such thing as not being able to afford something - just put it on debt!  He laughs at people who don't run the air conditioner as being silly in their frugality and view of the world as having scarce resources.  Live it up! 

Through-out the book there's some pseudo-religious crap about living to your highest Soul Purpose and how that requires you drive the best cars ($200,000 ones!) and wear the most expensive sneakers (tell the clerk money is no object!) and attend the most expensive seminars (his!).  He seems to think that he's not just smart, he's divinely ordained to live large.

To say I found this book offensive would be wrong.  Mostly I felt like pointing and laughing at a guy who is surely hurting right now.  He mentioned a couple of times how smart he was to get me to shell out $25 for his book and I was smugly pleased each time to note that I got it out of the library.

He had just enough smatterings of insight about what's involved with becoming financially well-off that it tainted the message of utter Wrongness with Correctness in a few short paragraphs.  I find this worrying more than offensive.  I sincerely hope whoever gets it out of the library realizes that the lines underlined in pencil were the places he was dead WRONG, not insightful gems.  (It not being my book, I didn't make margin notes beyond occasionally underlining to use for this review.)  If you're interested in how to overcome middle-class views on entrepreneurship, risk-taking and buying real estate to flip, a better read would be Rich Dad, Poor Dad by Robert Kiyosaki.  But my advice is to get that one out of the library, too.

( 13 comments — Leave a comment )
Phoebeallyphoe on December 21st, 2008 05:15 pm (UTC)
Before I got to #4, I recognized a lot of his thinking as similar to that of people who follow the prosperity gospel - the mostly-evangelical-Christian theory that God wants you to be rich. I have no clue how that one got started, since Jesus wasn't exactly a big fan of the wealthy, other than that the way you show God you deserve riches is to give lots of money to the church.

I wonder if this guy was a Californian. When my sister flunked out of college back in '96 or so, she went off to California and promptly got a job paying about as much as his starting salary. Which was just enough to cover the rent on a bedbug-infested 1-bedroom apartment an hour's drive from work.
Admiral Naismith: JumpYouFuckersadmnaismith on December 21st, 2008 06:15 pm (UTC)

Great things happen if you just WANT IT bad enough.

Conversely, if anything bad happens, it must be your fault for not wanting the good thing enough. In fact, you probably attracted the disaster by being "negative".

And there I was wondering why there seem to be so many more horses lately...
rev_macrev_mac on December 21st, 2008 06:28 pm (UTC)
by George, I think you've got it.

And don't forget sick people are so because they make themselves
weekendpbsweekendpbs on December 21st, 2008 08:58 pm (UTC)
and that if your kid dies it's because you didn't pray hard enough or your faith wasn't strong enough. accurate and impermanent as breathingthatgirljj on December 21st, 2008 11:04 pm (UTC)
More specifically, look up information on New Thought churches and beliefs. My father was really into one of those churches when I was young.
rev_macrev_mac on December 21st, 2008 05:56 pm (UTC)
Perhaps he is subscribing to the "law of attraction", and interesting concept hyped by self-help types. It also has almost a religious quality to it. Get anything you want (down at Alice's restaurant, walk right in, sit right down…) it will be drawn to you.
Admiral Naismith: JumpYouFuckersadmnaismith on December 21st, 2008 06:13 pm (UTC)

This is a downright dangerous book.

There are times when I feel downright tempted to live by it--which in my case would probably entail cashing in whatever I have left, having a glorious bacchanal on it for a year or two, and then jumping off a high place when it runs out...because what's the use, we're all doomed anyhow. Of old age even if the current economy and the overheated overpopulated planet manage to recover. I'm not sure whether I'd drag my loved ones over the high place with me, or leave them behind. Depends on what seems like the bigger mercy, I guess.

But those thoughts come when I'm really at my worst. There are things that might happen that would steer me into such a course, and that doofus may be similarly steering people that way.

But yes, I too love getting library books and reading an author's comment to the effect that I paid money for the book and so it must be good/I'd better read it/it proves she's a success/whatever. Seems to me authors should be more careful about comments like that.
W. Lotus: Peacefulwlotus on December 21st, 2008 08:54 pm (UTC)
I borrowed "Rich Dad, Poor Dad" from the library over a year ago, and I like a lot of what he had to say. It challenged the way I used to look at money in a good way.
Gwendally: debtgwendally on December 21st, 2008 10:54 pm (UTC)
I agree with this. I found "Rich Dad, Poor Dad" a useful lens to bring to my own finances, too. But it's all a caricature of how to actually do your finances - I don't consider Kiyosaki to be a guru.
W. Lotus: Peacefulwlotus on December 21st, 2008 11:51 pm (UTC)
I don't consider him a guru, either. He's just a man with some good ideas. Furthermore, some people have expressed doubt about how true-to-life Kiyosaki's book was. But as a tool to get me thinking, his book is useful.
Miss Mannersmiss_manners on December 21st, 2008 10:55 pm (UTC)
Just from the list the only one that half way makes sense is #1 and even then I'd want to see the details.

RD,PD was influential for me but I agree about the library or actually, get it as an audio book as I think it absorbs better that way.

Have you read The Top Ten Distinction Between Millionaires and the Middle Class? I think that is a much better "top 10" type book (although I prefer the audio). Interestingly he directly contridicts your recent book (duh) given the one of the ten he considers most import is "Millionaires think long term, the middle class thinks short term" where he defines short term as one month horizons.

The only place that list might cross over again is #1, but again based on your review I suspect the actual view behind rejecting scarcity is different. My rejection of #1, like a lot of success books, isn't rejecting that some things are limited but that most people create limits (such as "I can only gain more money by working more hours").
Gwendallygwendally on December 21st, 2008 11:31 pm (UTC)
Actually, his point was rather the opposite: don't say you can't afford something, figure you can work more hours and make more money instead! He really rejects the concept of frugality or saving, and constantly points out (quite repetitively, actually) that you can make all the money you want by engaging in your Soul Purpose.

As it happens, this is true for me. I am self-employed in a field where I have specialized training and skills and happen to enjoy doing something that others hate enough to be willing to pay me to do. If I put a little bit of time into it I can scare up money pretty much whenever I want (given a few days lead time.)

The thing is, I've spent six years getting a master's degree and serving an apprenticeship and another eight years building my business since then. This DOES happen to be true for me, but it's not exactly a strategy that will work for everyone, and it wouldn't work for me if I fell ill. (This is a very worrisome thing for self-employed people: get sick and you have NO MONEY.)

This guy is partly right that the way to riches comes from the recipe of being self-employed in a field you enjoy with a skillset peculiar to yourself. He's just partly wrong because it is NOT a sure-fire way to riches. For example, what if you really love being a daycare worker? Good luck getting rich that way!
Mademoiselle Purl de Chatpurlypuss on December 22nd, 2008 04:26 am (UTC)
Your description of this man's self view - that he must have been successful because he's brilliant and deserving, and not lucky - made me laugh out loud. In the last year of my twenties, I'm seeing that getting more mature for comfy middle class kids like me is a process (sometimes painful!) wherein you are forced to recognize that what you have and enjoy are disproportionately huge compared to what you actually earned or deserve.
( 13 comments — Leave a comment )