Is wealth a zero-sum game with few winners? How can you continuously build wealth?
Traditional wisdom tells us to maximize 401(k) contributions, avoid debt, and save diligently for a distant retirement. Garrett Gunderson’s book Killing Sacred Cows breaks down his alternative view of wealth creation and financial freedom: one that promotes strategic planning and empowerment.
Read more in our Killing Sacred Cows book overview.
Overview of Killing Sacred Cows
In his book Killing Sacred Cows (2008), financial advocate and self-made millionaire Garrett Gunderson challenges the conventional financial wisdom and misunderstandings that prevent people from achieving true financial freedom. He explains that we treat certain financial principles—like maximizing 401(k) contributions, avoiding debt, and saving diligently for retirement—as “sacred cows,” or unquestionable truths. But he argues that these precepts should be questioned and shows us alternative paths to wealth creation and financial freedom.
In this overview, we’ll unpack Gunderson’s financial advice, exploring:
- How you can continuously create wealth through value generation
- Why traditional retirement planning strategies fall short and how to build sustainable cash flows into your retirement
- How to distinguish between destructive debt that drains resources and strategic debt that can build your wealth when properly leveraged
- Why there’s no such thing as a risky investment—and how you can minimize your risk and empower yourself as an investor by enhancing your knowledge
Part 1: Reject the Zero-Sum Framework
Gunderson writes that, according to popular belief, we live in a world of scarce and limited resources. He calls this attitude about wealth the “zero-sum” framework and explains that within this framework, no new wealth is created. There’s a limited supply of existing wealth, and you “win” by claiming as large a share of it for yourself as possible. And because the amount of wealth is finite, your gain can only come from someone else’s loss.
Gunderson says you should reject the zero-sum framework of wealth. In this section, we’ll explain why, exploring the costs of the zero-sum mentality and the mistaken theory of value it relies on. Then, we’ll explain what Gunderson says actually constitutes value.
The Cost of Zero-Sum Thinking
Gunderson warns that viewing wealth as finite leads you to adopt inefficient and harmful financial practices that hurt not only your bottom line but also your happiness. He writes that zero-sum thinking creates constant anxiety about resources: When you believe there’s only so much to go around, you become preoccupied with securing “your” portion before someone else claims it. This fear of loss transforms money from an instrument that facilitates your happiness into something you serve and protect at all costs.
How Wealth Really Works
According to Gunderson, the zero-sum framework is rooted in an incorrect theory of what constitutes value—namely, that objects alone have inherent value. According to this view, objects have some fixed, innate worth that exists independently of human perception. Thus, the world’s total wealth is simply the sum of all these objective values. This line of thinking leads you to believe that the only way to increase your wealth is by acquiring more of these inherently valuable objects—assets like cash, gold, real estate, and collectibles—from the finite supply that exists.
Part 2: Your Money, Your Control: Rethinking Retirement Plans
Having established that wealth creation isn’t a zero-sum game, Gunderson next challenges conventional retirement planning strategies. Just as the belief in limited resources leads to ineffective financial behaviors, Gunderson argues that traditional retirement advice—like simply accumulating funds in 401(k)s and never touching them—stems from the same flawed mindset. In this section, we’ll look at why 401(k) plans don’t offer the financial security they promise, how stockpiling wealth in anticipation of retirement can be self-restricting, and how creating cash-flow investments is the best path to financial security and peace of mind.
The False Security of 401(k)s
According to Gunderson, when you believe wealth is scarce and fixed, you’re more likely to surrender control of your money to financial institutions that promise security through conventional retirement vehicles such as 401(k)s and IRAs. However, this approach comes with drawbacks: limited control over your investment, substantial administrative fees that diminish your returns, restricted access to your own capital, and tax deferral that merely postpones rather than eliminates your tax burden. In the end, he writes, only the banks win with these plans—they get to keep your money for decades and make loans with it at high rates that far exceed the small returns they pay out to you.
Gunderson further observes that, despite decades of Americans following financial advisors’ guidance—contributing to 401(k)s, maximizing IRAs, and living within their means—financial security in retirement remains unattainable for many. A significant percentage of Americans approach retirement with insufficient savings, despite having followed the prescribed financial playbook. Gunderson argues this isn’t a failure of individual discipline—instead, it’s an indictment of the retirement model itself.
Wealth Paralysis: When Saving Becomes Its Own Prison
Gunderson observes that the conventional wisdom about work and retirement is that you should dedicate the prime years of your life to working—even if you find that work unfulfilling—in exchange for the promise of leisure in your later years.
However, there’s a psychological trap at the heart of this conventional wisdom: The very discipline that helps you accumulate wealth during your working years can become a barrier that keeps you from enjoying it in retirement. After a lifetime of cultivating saving habits, many retirees find that they remain fixated on needless austerity and self-imposed scarcity after they stop working. Having spent their working years building their retirement fund, they’re now too wracked by anxiety and fear of “losing” it to actually spend and enjoy the money they worked so hard to earn.
Build Cash Flow in Your Retirement
Gunderson draws an important distinction between stockpiling wealth in anticipation of retirement and setting yourself up for continued income generation in your retirement. When your retirement success is measured solely by your account balance going in, you’ll come up against the psychological challenge of spending down your retirement balance—which, as we’ve seen, can be agonizing for retirees who’ve had it drilled into them that they need to stockpile retirement funds at all costs.
However, writes Gunderson, by shifting your focus to sustainable monthly cash flow in retirement, you liberate yourself from this self-imposed prison. Instead of relying solely on withdrawals from your portfolio, Gunderson suggests that you develop multiple income streams from cash-flowing assets like rental properties, passive business income, or insurance products like whole life insurance. When you’re continuing to generate income even in your retirement, you can enjoy this period of your life stress- and guilt-free—because you’ll know that even if you’re spending money from your 401(k), you’re continuing to generate new wealth.
Let’s illustrate this idea with an example. Imagine Jane and Michael both retired at 65 with similar financial pictures—each had accumulated approximately $1.2 million in retirement accounts after decades of disciplined saving. Jane followed the traditional retirement model. Her financial advisor helped her calculate a “safe” withdrawal rate of 4% annually from her portfolio. This meant she could spend about $48,000 per year, adjusting for inflation. Every time Jane withdrew money, she watched her account balance decrease, creating anxiety. Despite having enough on paper, she found herself constantly cutting corners—skipping trips to visit grandchildren, avoiding restaurants, and postponing home repairs. When market downturns hit, she would panic and cut her spending even further, fearing she might outlive her money.
Michael took a different approach. While he had the same $1.2 million portfolio, he had spent the five years before retirement strategically restructuring his finances. He used $400,000 to purchase two rental properties that generated $3,000 monthly in net income. He allocated $300,000 to a dividend portfolio yielding $1,250 monthly. He and his wife had also built a small online business selling handcrafted items that brought in another $1,500 monthly with minimal time investment.
When Michael retired, he had multiple income streams generating approximately $5,750 monthly ($69,000 annually) regardless of whether he touched his remaining $500,000 in retirement accounts. When he did make withdrawals, he didn’t experience the same psychological distress as Jane because he knew new money was continuously flowing in.
Part 3: Rethink Your Approach to Debt
Having reexamined the flawed zero-sum approach to wealth and the flaws of the conventional retirement model, Gunderson next turns his attention to debt. He writes that debt only becomes problematic when your liabilities exceed your assets, creating a negative net worth. This is a more nuanced take on debt than the one most Americans have been conditioned to believe—namely, that all forms of borrowing are inherently negative. Once we free ourselves from this idea about debt, he writes, we can use it to build wealth. In this section, we’ll explore how strategic debt can be a powerful wealth-building tool and what kinds of debt you should still avoid.
Build Your Future Wealth With Strategic Debt
Gunderson challenges the conventional financial wisdom that all debt is bad by introducing the concept of strategic debt. When you take on strategic debt, you’re borrowing money that will ultimately generate assets with appreciating value—creating positive cash flow that covers or even exceeds the debt payments. This kind of debt builds wealth over time, and often provides tax advantages to boot. Examples of strategic debt include business loans that help you build a profitable company, real estate loans that generate rental income, or education loans that significantly increase your earning potential—all forms of debt that can create more value than they cost.
Recognizing the value of strategic debt requires a shift in thinking, writes Gunderson. Instead of avoiding debt like the plague, you need to instead evaluate debt based on its wealth-building potential. He notes that, when properly structured, this kind of debt can boost your net worth well beyond what might be possible through scrimping, saving, and denying yourself.
Let’s look at an example. Sarah and Michael had always been taught to avoid debt at all costs. However, when an opportunity presents itself, they decide to purchase a rental property in their city’s tech district. After calculating the expenses, they realize they can create a monthly positive cash flow of approximately $237. Over the next five years, the property appreciates by 4% annually as the tech district continues to grow, while rents also increase gradually. Instead of viewing the $200,000 mortgage as a debt burden to eliminate, the Thompsons recognize it as a strategic tool that allows them to control a $250,000 appreciating asset (with only $50,000 of their own capital), while generating monthly positive cash flow.
Avoid Destructive Debt
However, Gunderson notes that while not all debt is bad, there are certain kinds of destructive debt you should avoid. These debts typically finance consumption, depreciating assets, or lifestyle expenses that might offer you some temporary fun or happiness. For example, you might pay for a vacation with a credit card or spend a lot of money on a new car. These financial commitments only serve to drain your economic resources while failing to deliver any enduring value, growth potential, or appreciating assets. Worse, Gunderson writes, they often come with high interest rates. Every dollar you pay in interest is money you’re not investing in a growth opportunity, and that missing growth adds up significantly over time.
Part 4: Reduce Your Risk
Gunderson notes that life is unpredictable and full of financial risks. After all, you never know when the economy might turn and cause you to lose your job, or a market downturn will deflate the value of your assets. But Gunderson says you can avoid falling into a financial hole through two kinds of risk management—careful investing and insurance. We’ll explore both of these strategies next.
Investing Means Accepting Responsibility
Gunderson says traditional financial wisdom holds that high-return investments require high risk—in other words, you have to risk catastrophic losses to reap extraordinary returns. This happens because investors won’t accept greater uncertainty unless they’re offered the possibility of greater rewards. For example, say you have two investment options: a low-risk government bond that guarantees 3% annual return, and a high-risk startup stock that might return 15% or might lose 50%. You’d only choose the risky startup stock because it offers the potential for much higher returns than the safe government bond.
But, Gunderson writes, this logic is flawed because there’s no such thing as a “high-risk investment.” He argues that risk isn’t inherent to specific investments—instead, both risk and returns are functions of how much knowledge you as an investor bring to the table. You’re responsible for acquiring that knowledge and using it to inform your investments. If you experience losses, it’s not because “the market or investment is risky,” but instead because you invested without sufficient knowledge or control.
Buying into this philosophy encourages you to prioritize your financial education before making investment decisions, seek investments where you can actually affect the outcomes instead of just passively accepting them, and understand how value is being created with every dollar you invest. This approach, writes Gunderson, is empowering: It puts you in the driver’s seat of your financial future and encourages you to invest in yourself through knowledge, education, and experience.
Don’t Try to Self-Insure
Now, let’s discuss other kinds of financial risks—the kinds that come from economic downturns and personal catastrophes, leading you to lose income or assets (for example, a medical condition forces you to leave your job). Gunderson writes that if you’re looking to reduce this kind of risk, you’ll need to have a smart approach to insurance. After all, the whole purpose of insurance is to reduce risk by paying a small, certain amount (your monthly premium) to avoid potentially losing much more later if catastrophe strikes.
Gunderson notes that many people convince themselves they no longer need insurance once they reach a certain net worth because they’re “self-insured.” In other words, they believe that they’ve stockpiled enough assets to cover potential losses without the need to purchase traditional insurance policies. But this approach is flawed for two reasons, according to Gunderson.
First, when you hold your own money in reserve instead of buying insurance, what you’re really doing is preventing that money from being invested in growth opportunities where it might generate returns. In many cases, the returns you’d have likely earned from investing that money would be significantly higher than what the insurance premiums would’ve cost.
