Book SummaryKilling Sacred Cows, by Garrett B. Gunderson

1-Page Summary1-Page Book Summary of Killing Sacred Cows

In 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...

Killing Sacred Cows Summary 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.

Mercantilism and Zero-Sum Economic Competition

Although Gunderson brands zero-sum economic thinking as wrongheaded and counterproductive, governments once widely accepted and promoted the idea of national wealth as a zero-sum proposition.

The theory of mercantilism, which dominated European economic thought from the 16th through the 18th centuries, saw national wealth in purely zero-sum terms: The...

Killing Sacred Cows Summary 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,...

Killing Sacred Cows Summary 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...

Killing Sacred Cows Summary 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...

Shortform Exercise: Transform Your Financial Mindset

Examine your beliefs about money and wealth creation.

Gunderson argues that wealth isn’t a zero-sum game but rather something that can be continuously created through value generation. How might this perspective change the way you approach your career or business? Can you identify specific opportunities where you could create more value for others?