By Garrett B. Gunderson
Gary Silverman owns a fee-only financial planning firm in Wichita Falls, Texas. He is the editor of the financial newsletter Personal Money Planning, and writes the newspaper columns Your Money and Biz2Biz.
"The 401(k) is the ultimate sacred cow of personal finance. It is the supreme representation of the marketing genius employed by financial institutions to get you to hand over and lock up your money. If you haven't yet noticed, I'm out to kill this sacred cow."
So begins the ending of the book, Killing Sacred Cows, by Garrett Gunderson. One of the reasons given for the 401(k) being the ultimate sacred cow that needs shooting is that it is an "FBO" account. It is held in trust for the employee's behalf. The 401(k) is born of the tax code and as such, "If history proves to be a reliable guide, 401(k) funds are therefore in great jeopardy. In the same way that the government raises and lowers taxes at their whim, it can change the rules and take the money that you so diligently saved."
Gunderson's book is filled with great truths that you would want your clients to take to heart. He wants people to feel positive about themselves and the options they have in life. He wants them to know that the quality of their lives is not determined by the quantity of their stuff. Sounds like life planning to me.
Who is Gunderson? According to a press release, he's formed nearly two dozen companies and conducts transformational seminars. Oh, and he was a multimillionaire by age 26.You can learn more about him and his current thoughts at www.garrettbgunderson.com/blog.
So why is he so against saving money in a 401(k)? (Note: he's not that enamored with an IRA either.) Simple: saving money in a 401(k) or IRA puts the investor in a position to keep the money slowly growing until it is needed to supply retirement needs. Instead, Gunderson wants the readers to use their money continuously, "that is, putting it to work and using it to provide services to ourselves and others ..."
He laments the supposed well-meaning advice from the financial industry: "That financial success comes from investing in the right products, employing the right strategies ... This despite the fact that it's not working for anyone."
OK, in that case, how do people continue to eat once they stop working? How are they supposed to use their money if not through saving and investing it? Gunderson answers, "... if you want to prosper, you must stop thinking about money and instead start thinking of ways that you can create maximum value for as many people as possible."
It all comes down to this: the best investment the readers can make is to invest in themselves. They need to cast off the financial myths and embrace their "soul purpose," a term used abundantly in the book. Your investing in self instead of financial products will lead you to the perfect job, or more likely the perfect business that you will run to provide value to both you and others.
I think the direction that he steers people will be wrong for most. The vast majority of the population will have a very hard time translating their purpose into a roof, a coat, and a plate of food for the rest of their lives.
Gunderson does make some good points. After all, many of the readers of this review took all they had, invested in themselves and their sole purpose (a financial services firm) and have done pretty well because of it.
Greenleaf Book Group (2008)