Saturday, July 16, 2011

Book Review - Safe Money Millionaire

The book "Safe Money Millionaire" is a short (120 pages) little "How To" book written in a conversational tone for the average person. In it BYU trained Brett Kitchen and Ethan Kap from Utah debunk widely accepted financial wisdom. They lay out a step-by-step method for individuals to protect their assets and make gains WITHOUT risking savings in the volatile unpredictability of the stock market.

Through stories and examples Kitchen and Kap propose a few very basic ideas.
1) wanting to get rich is a worthy goal.
2) much of the popular financial advice for how to do that is flawed.
3) there is a better way.
4) follow us.

One of the basic premises of this book is that investing money in a 401K retirement plan is a bad idea. Kitchen and Kap definitely have an uphill battle to get every day Americans to believe that 401K's are unwise. Even after the horrendous financial meltdown of 2008, MANY people are still very much committed to the idea that 401K's are one of the best ways to plan for retirement. But like salmon swimming upstream, tearing down that idea is exactly what they set out to do, going against the current council of many popular money folks with a lot more name recognition.

That being said - just because a person gets famous in financial advice circles does NOT mean the advice they give is sound. There are plenty of Dave Ramsey Bashers or people who hate Suze Orman out there. I LOVE the quote from Bertrand Russell that Kitchen and Kap included on page 25: "Even when the experts all agree, they may well be mistaken."

Understanding the problems with 401K's was pretty easy for me. Where I balked was at the alternative they offered: Cash value insurance plans. I'll admit right up front, I have a VERY STRONG personal bias against most forms of insurance. Getting past that bias was all but insurmountable for me.

Ideas are tenacious little buggers. Once a person has latched on to some idea, opinion or value they tend to burrow deep into our psyche, with roots deeper than a mallow weed. In a world full of ever shifting, complex information, most of us are more likely to notice the things that CONFIRM what we already believe rather than giving our attention over to the things that contradict. We are constantly on the lookout for the bits and pieces that tell us what we already know to be true IS true, so we can continue to hold on tight to our ideas, feeling confident we are right. We are human deleting machines... we go around daily ignoring or refuting the data from our lives that suggests we might just be going down a wrong path (no matter how valid that information may be).

So no matter how clearly the book explained the merit of having a 101 Plan, it just didn't appeal to me. While I do begrudgingly fork out money each month to insure my life, my home and my car, I resent what I see as a "fear tax". I believe ALL insurance companies operate on focusing people's fear and worry.

Personally, I'd rather have a chunk of cash in a safe, interest bearing fund and rely on THAT to help me get through the difficulty I would face in the unforeseen event of my pipes bursting or my car crashing or my house burning down. I long for the day when I can be 100% self insured. I'm not there yet. But I really do want to be able to forget about any insurance policy at all (other than medical care) at some point in the future.

So wrapping my mind around the notion that using cash value life insurance as an alternative investment was a leap that I had more than a little difficulty wrestling with. Also, wanting to know a little bit about the backgrounds of the authors I did some digging. I found Brett Kitchen's FaceBook page and see there that he is in insurance sales. Oh really? Having an insurance salesman tell me that buying a cash value life insurance policy is a wonderful idea just feels a bit like having a fox guard my hen house. He may have some very valid points to make, but my skeptic brain wonders how much of the advice here will benefit ME and how much will benefit HIM if I should take it.

However, I kept reading.

Even if I disregard that part of the book all together, there were several other little gems along the way.

I was impressed by the part that explained that getting a fat income tax refund is NOT in your best interest. (I've never understood why people feel so good about letting Uncle Sam use their money all year long for free.) I totally agree with the concept of structuring deductions so the amount you pay IN to the IRS comes as close as possible to amount you will be billed. If I want to have a cushion "just to be sure" I will put that amount into a separate bank account THAT PAYS INTEREST TO ME and then have it available to pay any remaining tax bill that may come due.

There were also a few other things that were worth the read.

When I was done with the book I cruised over to take the online quiz at the authors' website to find out my TRUE FINANCIAL AGE. (This is supposed to assess how many more years I will have to work before I can securely retire.) I must admit, I plugged in all the required numbers with a bit of trepidation. I was pleasantly surprised, however, when it said I could retire at 64. REALLY? Huh, I figured I'd be working AT LEAST another 15 years which would put me closer to 70. But no matter.... truth is I will work for the insurance benefits whether I need the actual pay check or not.

Bottom line for me, this book is worth picking up. It is a quick, easy read that has some useful information. Even if you don't agree with or follow all of their advice (like me), I think it is a good stepping stone in becoming more educated about financial matters and goes a long way to demystify the investment world.

To see what other reviewers had to say about this book, check out Tristi Pinkston's Virtual Book Tours HERE and scroll down till you see this book over on the right hand side among others that have been reviewed.

To buy this book you can go to or check out your local bookstore.

Disclosure: I received a free copy of this book so I would review it. I had no obligation to say favorable things and have no other incentives for this posting.


bakingbarb said...

Interesting thoughts, I've never been one to trust large corporations (401Ks to banks) to keep my money for me. Over the last few years I've felt justified in this. I don't need to be rich though but safe is how I want to feel, hard to do in this economy.

Belladonna said...

Barb - You bring up an EXCELLENT point... the desire to feel safe. I don't believe that can ever come entirely from someone's financial portfolio. Rich or poor, security is something I think we all long for.

brett said...

Thanks for the review, let me know if you have any questions about the book.

Brett Kitchen
Author, Safe Money Millionaire

Jeff Maxwell said...

One should not confuse life insurance with retirement planning. Life insurance is a contract that is used to protect your estate from unfortunate death. Where as a retirement plan involves asset management and growing wealth. One should quickly realize that those that own are those that grow their wealth. You are not going to do well in growing wealth without owning. The Warren Buffets of the world own.

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