In this article, a “Sacred Cow” refers to something that a culture or society considers an unquestionable truth. In the book “Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity“, author Garrett B. Gunderson takes on 9 common financial myths and explains why they are not infallible truths. I’ll just go through the introduction and the first myth in this review, and let you read the book to learn about the other 8.
“Killing Sacred Cows” Introduction
As seems customary for both self-help and financial enlightenment books, Gunderson introduces his book with a series of questions meant to provoke some thought in the reader before slamming home the ground shaking revelations that fly in the face of all we’ve ever known. For example: “Why do so many of us struggle financially when we live in the most free and prosperous country in the history of the world?” or “Why do we continue to struggle when we are bombarded daily with information on how to become wealthy?“.
Gunderson believes most of the myths we believe today originated during the Great Depression. Ideas such as scarcity, accumulation theory and “Money is Power”. These financial myths are reinforced by those around us, and we tend to never question them thoroughly to learn if they’re true. Many of these myths just seem true, so why question them. As a logical person, I would easily think that there is only so much on this earth to share, so obviously scarcity is a real thing. I mean, there’s people starving in Africa and droughts in western U.S., right? Those are obviously scarcities in action.
But Gunderson contends that believing in these myths can have a destructive effect on our finances, such that we get stuck in a rut through our entire life where we can’t feel like we can get out. We feel like we’re stealing from others if we try to pursue wealth, or that prosperity is all about the numbers, and having more means we’re more prosperous and thus happier.
Now I will readily admit that many “financial gurus” on late night TV infomercials have conned us into believing they have the “system to wealth”. I’ve given up over a thousand dollars on “get rich quick” schemes. With enough time and work, I know I could have made a profit, but I relied on others’ knowledge, and not my own, to make me money. I didn’t educate myself first, or else I would have learned that all the knowledge they were charging hundreds or thousands for was readily available on the web and in the library. I thought they had a secret, and I got burned. Now I’m wary of any “new financial ideas”, and Gunderson states that’s one thing hurting our chances to get out of our ruts.
We need to be cautious and wary about financial scams, but we also shouldn’t just throw out any new way of looking at money, relationships or the world in general. And this is what Gunderson gets into with “Killing Sacred Cows“.
Financial Myth 1: The Finite Pie
In Cameron Taylor’s book “Does Your Bag Have Holes: 24 Truths That Lead to Financial and Spiritual Freedom“, he cites the principles of creation and abundance to explain this myth further. Gunderson states that scarcity is “predicated on false beliefs, misinformation, outdated ideas, and fear“. He admits that scarcity may be valid at different times and different places in our physical world, but that we’re looking at scarcity and abundance in the wrong way.
My own understanding of abundance theory suggests that we shouldn’t think that things like fresh water, corn, oil or other specific resources are endless; rather, we need to think about bigger things as “abundant”. While we have limited fresh water, we have the knowledge and capabilities to build desalination plants to turn salt water into fresh water. While we have limited coal and oil to power these plants, we have the knowledge and capabilities to build wind and solar power plants to supply “endless” power. While we have limited farm land to produce food for our planet’s current population, we have some amazing, and proven, concepts for building farming colonies in the ocean or in otherwise uninhabitable or unthinkable farming locations. We can re-purpose our lands, our resources and our thinking to continually provide for our planet’s growing population.
Now I will admit that I am against the parasitic nature of the human population, which is one reason we haven’t yet committed to starting our own family, but I also recognize that our people can be fed, clothed, warmed/cooled, etc., but only if we want to try a bit harder. I’m also very anxious about the pollution associated with the human population, but again, I recognize that when it becomes a priority for a majority, we can produce the means and knowledge on treating, reusing and recycling our waste so that perhaps we can reverse the worsening environmental trends.
But we’re not even close to that mass-mindset yet. Will we reach it before our planet reaches a critical tipping point? I don’t know, but I do know we have the capabilities and resources to get there.
The Other Financial Myths
I’ll just list out the 8 other myths with the information provided by the author in the table of contents:
- Myth 2: You’re in it for the long haul: The accumulation theory of wealth creation, which teaches us to save money and compound interest for long periods of time, prevents us from achieving our full potential. A more productive financial theory is utilization, which helps us to maximize our value creation and therefore our wealth in the present moment.
- Myth 3: It’s all about the numbers: Prosperity has less to do with our financial numbers on paper and more to do with our happiness and fulfillment. This shift in mindset helps us to put numbers in the proper perspective.
- Myth 4: Financial security: True financial security does not come from the government, corporations, benefits, and entitlements; it comes from within us. Taking responsibility for our wealth leads us to transcend false security to find both true security and freedom.
- Myth 5: Money is Power: Money has no power except the power that people give it. Money is an effect, or a byproduct; value creation is the cause.
- Myth 6: High Risks = High Returns: “High risk equals high return” is a gambling, not a true investing, philosophy. The best and safest investments are those that align with our passions, knowledge, and abilities and that we can control.
- Myth 7: Self-Insurance: “Self-insurance” really means no insurance. The best way to reduce your insurance expenses is to get the best insurance and as much of it as possible.
- Myth 8: Avoid debt like the plague: People fear debt because they don’t understand the technical definition. Understanding the technical definitions of debt and liabilities opens up a world of possibility.
- Myth 9: A penny saved is a penny earned: Value is a far more important consideration that price when it comes to our purchases and investments.
Gunderson finishes up with a “Formula” for defeating the myths, and adds a chapter on “The 401(k) Hoax”. Apparently, 401(k)’s are the ultimate hoax, but you’ll have to read it to find out why.
I will admit that I’ve only gotten through the Intro and Myth 1 chapters due to my own time constraints, so I’ll be holding onto this book to learn what Gunderson has to say about the other 8 financial myths, as well as the 401(k) chapter. Go see if it’s in your local library, or consider buying a copy for your own library. From what I’ve read so far, Gunderson is careful in his explanation of his ideas, and risk in reading his myth-busters only lies in the execution of his ideas.