PDF Summary:Killing Sacred Cows, by Garrett B. Gunderson

In Killing Sacred Cows, author and financial advocate Garrett Gunderson challenges everything you thought you knew about money. Traditional wisdom tells us to maximize 401(k) contributions, avoid debt, and save diligently for a distant retirement. It also tells us that wealth is something to fight over, a zero-sum game with few winners. Our guide unpacks Gunderson’s alternative view of wealth creation and financial freedom: one that promotes strategic planning and empowerment.

First, we’ll explore why wealth isn’t a limited resource to hoard, but something you can continuously generate. Next, we’ll explain why conventional retirement vehicles may not serve you as well as building cash-flowing assets. Then, we’ll examine how to differentiate between wealth-draining debt and strategic borrowing that can accelerate financial growth. Finally, we’ll show how knowledge and understanding can transform your relationship with money. In our commentary, we’ll complement Gunderson’s ideas with insights from other financial experts to offer a fresh way to think about money.

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Attaining Mastery

Gunderson suggests that to create wealth, you need to invest in your personal development. In Mastery, Robert Greene identifies two critical areas you should invest in: technical proficiency and social know-how.

Technical proficiency involves developing specialized skills and knowledge in your field that enable you to create unique solutions and innovations. As you deepen your expertise, you can identify unmet needs, develop better methods of solving human problems, and create products or services that others value highly. This directly translates to wealth creation as described by Gunderson—your ability to solve problems becomes increasingly valuable in the marketplace.

Social know-how helps you effectively communicate your value, collaborate with others to multiply your impact, and navigate professional environments where your ideas can thrive. This skill set enables you to find the right partners, attract clients or investors, and position your creations where they’ll generate maximum value.

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.

401(k)s, Banks, and the Loss of Financial Autonomy

Some commentators have argued that the 401(k) system gives other actors far too much control over your money. Rather than guiding your own investment decisions, you have to trust that the portfolio managers of your 401(k) are choosing the right funds.

On top of that, fund managers are offering you a one-sided deal: While they’re paying you relatively small returns on the money they’re managing for you, they’re taking your money and investing it across a range of far more lucrative opportunities. This system, in which financial institutions invest the deposits they collect from shareholders is called fractional reserve banking. Some critics—notably Murray Rothbard, a prominent Austrian School economist and libertarian theorist—argued that fractional reserve banking constitutes fraud and is fundamentally immoral, because customers reasonably expect 100% of their funds to remain available on demand, not for a portion to be lent out.

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.

The Shortcomings of the 401(k) Retirement System

The 401(k) retirement system, which emerged in the early 1980s, has largely replaced traditional pension plans and transferred retirement risk from employers to individuals. However, some experts write that these plans have failed to provide retirement security for many Americans. While these plans have generated over $7 trillion in assets, the benefits have flowed disproportionately to higher-income workers. Many middle-class Americans, despite contributing regularly to their 401(k)s, find themselves with insufficient savings for retirement. Some estimates project that around 40 million middle-class workers will face poverty or near-poverty in their elder years.

The situation is even worse for lower-income Americans. Nearly half of Americans aged 55-66 have no personal retirement savings, and those in the 20th-39th income percentile have median retirement accounts of just $20,000. Many live paycheck to paycheck and cannot fathom contributing to retirement accounts.

Bipartisan solutions are emerging, including mandatory retirement plans, opening government-sponsored retirement programs to all Americans, and potentially redirecting 401(k) tax benefits to strengthen Social Security. These proposals aim to create a more inclusive retirement system that serves Americans across all income levels.

Retirement Projections Don’t Account for Financial Reality

Furthermore, Gunderson writes, 401(ks) aren’t a realistic retirement plan for most people because they rely on steady contribution rates and uninterrupted compound growth—assumptions that modern Americans can’t take for granted. He notes that today’s workforce experiences career trajectories more akin to a wilderness journey than a straight path. Economic downturns can derail even the most carefully structured financial plans. Industries transform rapidly, forcing mid-career shifts that often come with temporary income reductions. Health challenges, caregiving responsibilities, and various life circumstances frequently necessitate career pauses that the traditional model fails to account for.

(Shortform note: Retirement experts agree with Gunderson’s prediction that the relative instability of today’s workforce could spell trouble for the next generation of retirees. The expanding gig economy in the United States—in which people work through short-term contracts or freelance work rather than permanent jobs—creates a retirement preparedness crisis. Nearly one-third of gig workers never expect to retire, and 45% anticipate working beyond age 65. Unlike traditional employees, they lack employer-sponsored retirement plans, matching contributions, and financial planning resources. Additionally, almost 30% report that the gig work model harms their ability to save.)

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.

Escape the Work Trap with FIRE

Gunderson says saving for retirement is a trap—you spend decades in the workforce only to enjoy a few years of retirement, and then you’re still too anxious about spending to enjoy your retirement. But members of the Financial Independence Retire Early (FIRE) movement say it doesn’t have to be this way. With FIRE, you gain control over your most precious resource—time—by making strategic financial decisions during your prime earning years.

Like others who save for retirement, FIRE practitioners live frugally in the present, dramatically reducing expenses and maximizing savings (often 50-70% of their income). But they unlock decades of freedom in the future, accumulating enough wealth to retire comfortably in their 30s, 40s, or 50s. They often achieve this by generating passive income streams that cover their living costs (an idea Gunderson explores, as we’ll see in the next section).

This allows people who embrace FIRE to prioritize enjoyment of their lives rather than an endless slog of work. They can travel, pursue artistic interests, volunteer for causes they care about, launch passion projects, or simply spend more time with family and friends while they’re still young and healthy enough to fully enjoy these experiences.

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.

The Return of Corporate Pensions

Gunderson says you should set up multiple income streams that will generate cash during your retirement, such as rental properties, passive business income, and whole life insurance. Some commentators have called for another way to restore stable retirement income: returning to the system of private-sector pensions.

Corporate pensions were once a cornerstone of American retirement security, providing guaranteed income for life after years of service. But by 2019, only 28% of retirement coverage came from these traditional pension plans, with just 11% of private-sector employees participating in one. Instead, two-thirds of private employees now have defined-contribution plans like 401(k)s, where workers bear the investment risks themselves.

If corporate pensions returned, however, they would be another form of passive, guaranteed income for retirees, supplementing the other income streams Gunderson identifies. Their return would make it easier for retirees to live less austerely and pursue the passions and dreams they had to put on hold while working.

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.

Alternative View: Debt Is Your Obstacle to Wealth Building

Some financial writers take a different approach than Gunderson, warning about the threat posed by debt. In The Simple Path to Wealth, JL Collins writes that debt is the biggest obstacle to building your wealth. Banks, credit card companies, car dealers, and retailers actively promote consumer debt for two reasons: First, debt enables consumers to make purchases they couldn’t otherwise afford, increasing sales volume; second, lenders earn additional profit through interest charges on top of the original purchase price.

Collins also warns that debt significantly restricts your freedom by creating financial dependence on regular employment. When you have monthly debt obligations like car payments, credit card minimums, or student loans, you become tied to your current job’s steady income. This financial pressure makes it riskier to pursue new opportunities or start your own business, as you must maintain consistent income to meet payment deadlines. Without debt, Collins argues, you gain the freedom to make career decisions based on growth potential rather than immediate financial necessity.

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.

Beware of “Good Debt”

In The Simple Path to Wealth, Collins further cautions against three kinds of the so-called “good debt” Gunderson champions:

1) Business loans: Collins explains that some businesses regularly borrow for reasons such as maintaining cash flow for expenses, financing inventory, or expanding. Borrowing can help a business keep going smoothly. But it’s also risky, since debt creates financial obligations that must be met regardless of business performance—and fixed interest payments and principal repayment schedules don’t adjust during downturns.

2) Mortgages: Many people consider getting a loan to buy a house the epitome of good debt. But Collins says the 2008 financial crisis illustrates that this isn’t always the case. When mortgage loans became too easily available, combined with encouragement from real estate agents and mortgage brokers, many people were tempted into buying houses they couldn’t afford. This widespread pattern of unsustainable borrowing ultimately contributed to a financial collapse that affected the entire economy, demonstrating how even supposedly “good debt” can become problematic when lending standards deteriorate and borrowers take on excessive financial obligations.

3) Student loans: Many people consider college loans to be “good debt” because they lead to better career opportunities and higher lifetime earnings. However, Collins argues these debt obligations consume money that could otherwise be saved and invested. And unlike other forms of debt, college loans are exceptionally difficult to escape—they cannot be discharged through bankruptcy, and both wages and Social Security benefits can be garnished to ensure repayment.

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.

(Shortform note: Economists warn that destructive debts like credit cards aren’t just a drag on individuals and households: They pose a risk to the economy as a whole. As of March 2025, US household credit card debt had reached levels not seen since 2009. In particular, high-income borrowers (those earning over $150,000) show a trend of increasing payment delinquencies. The concern is that if US households are overburdened by debt, they’re going to start pulling back their spending in other sectors of the economy too. This decline in consumer spending could ripple through the economy, causing private sector layoffs, decreased investment, and plummeting tax revenues.)

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.

(Shortform note: The relationship between uncertainty and rewards is known as the risk premium. In the example above, the extra potential return (the difference between a 15% return and a 3% return) is the risk premium—the additional reward investors demand for taking on additional risk. Risk premiums take into account several factors, including the uncertain cash flow of the company you’re investing in and political uncertainties.)

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.

Information Asymmetry

One problem with Gunderson’s idea of sole investor responsibility is that humans are often making decisions with flawed or incomplete information. In Freakonomics, authors Stephen J. Dubner and Steven Levitt write about information asymmetry—situations where information is unequally distributed between parties. Dubner and Levitt warn that information asymmetry can be skilfully exploited by experts who rely on knowing more than the other party in a transaction or negotiation to extract value from others.

The authors use the example of a real estate transaction. As a seller, you might think that your real estate agent has your best interests at heart. After all, the more she sells your home for, the larger her commission will be. But she’s actually using her superior knowledge of the real estate market to get the best deal for herself, often at your expense. With her information advantage, she can convince you that a lowball offer on your house is actually a good one and encourage you to quickly sell your house below-market, so she can pocket her commission and move on to her next client.

Information asymmetry can have a system-wide impact, with the 2008 financial crisis standing out as a prime example. In the run-up to the crisis, Wall Street financiers created products like derivatives and collateralized debt obligations, whose larger implications many investors didn’t understand. When the housing market collapsed, those investors who bought these products were wiped out, while the sellers, who possessed a major information advantage, made a profit.

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.

(Shortform note: Despite Gunderson’s warning against it, some financial experts write that there are valid circumstances when you’d want to consider self-insurance. It might make sense not just if you have a high net worth, but also if you don’t have major financial obligations, dependents, or future liabilities, or if you can’t qualify for traditional life insurance due to health issues. The primary benefits of self-insurance in these cases include greater control over your funds—you can invest the money you’d otherwise be spending on premiums and use the returns on your investment to reinforce your financial safety net.)

Second, foregoing insurance leaves you more vulnerable than ever to financial losses. Your self-insurance approach means that you have to spend down your own assets and absorb 100% of the losses if a catastrophic event does occur. This permanently reduces your wealth and future earning potential.

When Insurers Put Profits Before Payouts

Although Gunderson touts the merits of insurance, other writers have argued that even if you do have insurance, it doesn’t offer much protection when insurers refuse to pay out what they owe. In Delay, Deny, Defend, Jay Feinman writes that, beginning in the 1990s, major insurers started realizing that cutting claim payments to policyholders would boost company profits directly.

According to Feinman, insurers like Allstate hired McKinsey & Company, a globally influential management consulting firm, to help them pay less on claims. McKinsey explained that the key to boosting profits was to widen the gap between what companies actually paid versus what they should have fairly paid to policyholders. McKinsey’s financial modeling showed how even small reductions in payouts across thousands of claims—even entirely legitimate claims—would translate to millions in additional profits.

If your insurance company operates this way, having insurance might not protect you from catastrophic losses. Your insurance company would instead put you through endless rounds of delay and stonewalling; make you lowball offers that don’t fully cover your claim; and, finally, aggressively fight you in court if you ever pursued legal action against them.