Killing Sacred Cows Blog

By Chris Miles

One of my clients recently asked me a question regarding whether or not someone needed passive income to truly be financially free. I believe that many of those striving for financial excellence have asked this same question and debated it.

In response to this question, I would ask "What is passive income to you?" How you define passive income will determine whether or not it can really exist and sustain itself.

Passive = No Direct Value Creation

Many believe passive income to be earning income on investments without having to do anything to earn it. Or, in other words, provide little or no value to receive a lot of value. However, if one owns a rental property and gets paid rent, is that really "passive?" Did you really do nothing for it? If you do nothing, will the income last?

Consider having a business as another example. If you provide tremendous value in a business for months, or even years, so that you create conditions to make money while you sleep, was that a passive event, or were you active in creating it? Do you still have to maintain it?

Do you think Garrett Gunderson put minimal time or value into Killing Sacred Cows to help it sell? If he decided to put little effort and time into it by cutting corners and using no research, what kind of "passive" income do you think he would receive from book sales?

On the other hand, if passive income means working smarter and leveraging your abilities, passions, and talents (Soul Purpose), and others' as well, could that kind of income continue for a longer period of time?

The Law of the Harvest

We violate the Law of the Harvest (sowing and reaping) when we believe that we somehow can reap where we have not sown. If one ever feels that they are getting paid to provide little to no value, that income will not likely last. As a result, it becomes a state of bondage due to uncertainty of the returns rather than financial freedom.

When I have had income streams in the past where I was not certain why I was receiving so much income for providing little or no value, the passive income never lasted longer than a few years. The only income streams I have been able to count on are the ones where I have significant control and contribution.

Some may consider maintaining control and applying one's human life value bondage, but is it really? Who is paid more -- one who provides value for others in a way that few can or one that gets paid doing virtually nothing and has a difficult time understanding why they get paid so handsomely?

With regards to passive income creating freedom, did our Founding Fathers say, "Once we are ‘out of the rat race' then we will begin to fight for freedom?" They declared their independence when they were still subject to King George's rule.

What is Financial Freedom?

Is freedom a state of having or a state of being? Could one ever have enough money to buy freedom? Can freedom be purchased with money? Is it possible that many that have passive income could be slaves to doing investments or businesses that they do not enjoy ? If you do real estate investing only to make money, how is that different than a job? Would you call doing an investment or business only for money "freedom?" If that were the case, couldn't one work a typical full-time job and still be free?

I do not believe that living financially free can be purchased. The only ones I have met that believe this theory are the ones that have never had money. I have had times where I have felt more enslaved with more money than living paycheck to paycheck.

Granted, our minds can be put at ease if we are wise stewards with our resources. We may choose to create conditions that cause more stress and worry, such as living on more than we have means. However, the only way to have financial freedom is to live a life of based on purpose, not a life based on our pocket books.

Freedom is a state of being, not a state of your account balance.

I challenge each of us to put money in the proper perspective as a tool to be used to serve others through our soul purpose rather than money being a master that will command us when we will be free.

To hear more, listen to my podcast about this.

Sandwiched between the latest "Twilight" vampire book and Obama-bashing tome on Amazon.com is the No. 11 ranked "Killing Sacred Cows," financial advice by entrepreneur Gunderson.

Click Here to Read the Full Article

By Chris Miles  

This is an essay I recently wrote about independence which I feel pertains to our discussion of overcoming myths and becoming financially free.

Could independence be no more than freedom from oppression and domination? Conversely, is independence merely unobstructed freedom to do anything we desire with no fear of intentional or unintentional consequences? Absolutely not! The more freedom we expect, the more responsibility we inescapably accept.

Today, we see a pandemic paradigm governing humans to blame anyone when things go awry. Thomas Jefferson proclaimed, "Timid men prefer the calm of despotism to the tempestuous sea of liberty." Why do we shrilly scream for independence and utter whining whispers at the first sight of responsibility?

To many, independence means to be "in dependence." They fancy others slavishly sowing so they can slothfully reap. They "fight" for freedom, but ultimately, beg for bondage. They want what has never existed - freedom from consequence. Indisputable independence is the freedom to pioneer one's path and be accountable for the destination.

My challenge is to consider what areas of our life and finances are we not taking on responsibility. Are we blaming market events, investors, financial institutions, oil companies, politicians, etc for our problems rather than creating solutions? Why can we see so clearly others' errors which are somtimes trivial and are so blind to our own destructive faults? What possibilities would arise if we focused the energy we waste complaining and repeatedly pointing out others' mistakes towards production and creating greater happiness and financial freedom through discovering soul purpose? What blessings are we failing to see because we focus more time and energy on the lack thereof? I challenge each of us to objectively ponder these questions, journal our responses, and identify ways to further focus on our financial independence.

| Book Review | Response #1 |

In a recent review in the St. Petersburg Times, personal finance editor Helen Huntley writes, "[Killing Sacred Cows] makes some good points. I agree that you need to take responsibility for your own financial success and you should invest in yourself and your money-making potential. However, the main purpose of the book seems to be to convince you to cash out your 401(k) -- he doesn't mind that you have to pay income tax and possibly a 10% penalty -- and pay Gunderson to show you how to manage your money. If you 'apply' for his program and you have enough money, you just might be accepted!"

We appreciate this perspective because it brings out three valuable things to discuss and clarify: 1) The primary focus and main purpose of the book, 2) Garrett's position on what you should do with your 401(k), and 3) The purpose of Garrett's "program" in question (the Financial FastTrack process that qualified participants of the 401(k) Hoax Challenge experience) and the reason behind the application process.

This post will deal only with the first point, and the second two will be discussed in subsequent posts. And none of these posts are meant to single out Helen Huntley; we simply raise these points because they are common points, indicative of typical perceptions about the book and its message.

The Main Purpose of Killing Sacred Cows

While Mrs. Huntley graciously agrees with the book's focus on personal responsibility and investing in oneself, her perception of its main purpose is reversed; what she mentions as "good" points (personal responsibility/investing in oneself) are the main points, and what she states as the "main" point (detailing the risks with 401(k)s) was a good point taken out of context. It's an understandable mistake, especially when one hasn't read the entire book, as Helen admits in her review.

As stated in the Introduction (pg. xvi),

"The purpose of this book is to train your mind and help you to cultivate the ability to be able to see through the myths that limit wealth creation. If this is accomplished, you may well experience a productivity breakthrough on an unprecedented scale...

"My purpose isn't so much to identify and answer every myth for every reader as it is to just get readers thinking about the rhetoric, propaganda, and traditional 'logic' that we're fed through the financial media."

Wanting to give her the benefit of the doubt, Mrs. Huntley's remarks made me wonder if perhaps we don't emphasize enough personal responsibility, stewardship, investing in oneself, and Soul Purpose, and if we over-emphasize the problems with 401(k)s.

Not wanting to go on gut feelings and knee-jerk reactions -- as those who are entrenched in financial myths often do -- I took a scientific approach, did a lengthy and in-depth search of the book, and extracted the following data on the major concepts that we focus on. The appearances of the words that I highlight below were only counted if they were in the proper context. (In other words, I could have counted much more, but I wanted to be as objective and fair as possible.)

In the context that I speak of, the word "responsibility" appears 77 times in the book, with 22 uses of the variation "responsible." "Stewardship" is used 30 times; "steward" 20 times. We speak of "Soul Purpose" on 124 occasions throughout the book. And most importantly, 61 times we use variations of the word "invest" in the context of teaching that the best investment one can make is an investment in themselves through education. The total uses of each of these words and phrases in their proper context -- which together represent our primary focus -- comes to 334.

Constrast that to just 78 mentions of "401(k)s."

(I eliminated all occurences of these words and phrases that were not relevant to the actual content of the book, such as references in the table of contents or the index.)

Clearly, something went wrong with this reviewer's analysis, yet it provides an excellent opportunity to illustrate the power that financial myths can have over us -- when subject to the myths we see only what we want to see. We see the things that coincide with our current beliefs, and casually reject anything that challenges our beliefs. Since 401(k)s are so popular, anything that challenges them will stick out much more than the things with which we agree, or think we already know.

As we learn in the Introduction of Killing Sacred Cows (page x),

"It's human nature to relate things that we are unfamiliar with back to the things that we are already familiar with, or with the things that we think we know. But what if the things we think we know are false, or at least misguided? How can we make sense of new things when our frame of reference is distorted or not founded in truth? One of the most critical steps we can take toward financial freedom is to accept the possibility that what we though to be true may be completely false, and that there are infinite truths we have yet to learn."

The main purpose of Killing Sacred Cows is not to convince any individual reader to cash out their 401(k). In fact, such a direct exhortation is not even a purpose of the book. We completely agree with Helen Huntley that to make such a blanket recommendation -- without knowing the context of the lives of individual readers -- would be highly irresponsible and inappropriate.

If any of our readers have taken this to be the core message of the book, we stress that it was not our intention. Targeting the 401(k) was a way to highlight the importance of self-reliance, responsibility, and stewardship -- not to make a specific financial recommendation to readers.

While we do, quite strongly and in no uncertain terms, detail the inherent dangers of 401(k)s, qualified plans, and the accumulation theory of wealth creation, we never once recommend to any reader that they should liquidate their qualified plan. (This will be discussed in the next blog post.)

The main purpose and primary focus of Killing Sacred Cows is to teach that individuals must take personal responsibility for their prosperity, be wise stewards over their assets and resources, invest in themselves, and live their Soul Purpose. It is to teach people that they are their most important investment -- not products, techniques, or strategies. It is to teach that what happens within a person determines what happens in their external world. It is to detail universal, timeless principles of wealth creation. It is to teach that these things are far more important than -- and determine the success of -- financial products, techniques, and strategies.

This is contrary to much of the traditional financial services industry which teaches people that the right financial products are what matter. Such advisors often recommend products without knowing the full context of their client's lives. We're taught that just throwing money into mutual funds and qualified plans and letting them sit for 30 years -- without knowing what they're doing, where the money is going, who is managing it, how to control it, and how it's creating value in the marketplace -- is all that's needed to make people's retirement dreams come true.

Garrett's point is that people need to take a step back from that flawed approach, invest in themselves, consider every angle, know what they're doing before they invest, and invest based on a macroeconomic plan that takes every aspect of their financial situation into consideration. People must stop believing that financial products -- such as 401(k)s -- have intrinsic value and that people hold the only intrinsic value.

| Book Review | Response #1 |

Join the Killing Sacred Cows Group on Facebook For Updates and Discussions