Book Summary: Safe Money Millionaire – Written by Brett Kitchen and Ethan Kap

Guaranteed retirement income is the name of the game. I think the financial industry has gone to great lengths to destroy trillions of dollars of wealth for a fee. I agree with people getting paid for services rendered, but there should be no fees in a losing market situation. We need to think about preserving our capital as well as building it and NOT gambling on our future.

Why is this important to me?

I always want to ask this question as if I am sitting in your shoes. I do not want to waste your time. How is your retirement going? Have you made money in the last three years or are you still recovering from the 40% cut Wall Street provided on typical 401K plans?

The real estate boom was created in part by derivatives. Maybe 100 people really understand these instruments. Our economy was on the brink of collapse because traders needed to get their year-end bonus. Selling financial instruments that can wipe out a banking institution with a mere 3% price movement is not the smartest way to go. Lehman Brothers, Bear Stearns and Merrill Lynch demonstrated this in 2008. Traders took advantage of billions of dollars for millions in commissions. I guess you need to go to Harvard or MIT to understand these trades, but the math doesn’t seem too smart even for a third grader.

Safe Money Millionaire is a good book to read if you are interested in retirement. Rule #1 simply states don’t lose money and rule #2 states don’t forget rule #1. This book adheres to these rules.

Safe Money Millionaire is a quick read that covers several topics. For the sake of time, I’ll cover three key takeaways. The ultimate goal is financial freedom and independence.

1. Breakout from Wall Street: If you invest strictly based on rates of return, then you’re doomed. This is a one-dimensional approach that doesn’t work for the masses. Wall Street launches investment tips 24×7. This is designed to attract sheep. Mad Money’s Cramer recommended viewers buy CIT Group because he was poised for a rally. Four weeks later, CIT filed for bankruptcy. This type of advice is seen everywhere. We encourage you to purchase mutual funds that have high past performance. If you really think about this, you are encouraging yourself to buy at a high price. To make money you need to buy low and sell high. Gambling is a sure path to financial ruin. You need to take your financial education into your own hands. You need to guarantee your principle and your rate of return. The keyword here is guaranteed.

2. Pay taxes on the seed or crop: Farmers can pay taxes on the seed or crop. What would you rather do? If you said pay for the seed, then you’re right, but this also blows your 401K logic out of the water. When you pay seed or basically invest in after-tax dollars, you’re locked into your future because you know exactly how much money you’ll get back. If you decide to pay for the crop, it is not guaranteed how much you will pay because the tax rate will most likely be higher. To be a safe money millionaire, you must pay for the seed, not the harvest.

3. Finance yourself to riches: This does not mean leveraging yourself to the limit with bank debt. Funding yourself to riches means creating your own bank and then using your money efficiently to get rich. Why was Willie Sutton robbing banks? Because that’s where the money is. This strategy is one of the strongest I have seen and using the Infinite Banking Concept with a long-term focus will absolutely secure your future.

Safe Money Millionaire is another book that highlights the concept of infinity banking and debunks traditional investment advice. In the book the authors quote Suze Orman. When asked what he invests in, he replies, “I save it and build it with municipal bonds. I buy zero coupon bonds and all the bonds I buy are triple-A rated and insured, so even in the city it sinks, I get my money”. When she is asked about playing the market, she says, “I have a million in the stock market, because if I lose it, I personally don’t care.” These statements are powerful because she invests in guaranteed returns. The bond market is NOT the stock market.

I hope you have found this brief summary useful. The key to any new idea is to work it into your daily routine until it becomes a habit. Habits are formed in as little as 21 days. One thing you can take away from this book is Rule #1: Don’t lose money. Schedule 15 minutes each day to educate yourself on guaranteed investments like permanent life insurance, secured bonds, and annuities to start your path to financial freedom. These require education on your part. When you do that and combine it with the Infinite Banking concept, then you will not only be financially independent, you will become rich.