|
Millionaire by Thirty: The Quickest Path to Early Financial Independence | 
 enlarge | Authors: Douglas R. Andrew, Emron Andrew, Aaron Andrew
Publisher: Business Plus
Category: Book
List Price: $22.99
Buy New: $8.99
You Save: $14.00 (61%)
New (39) Used (16) from $8.99
Rating:  15 reviews
Sales Rank: 188363
Media: Hardcover
Pages: 256
Number Of Items: 1
Shipping Weight (lbs): 1
Dimensions (in): 9.1 x 6 x 1.3
ISBN: 0446501840
Dewey Decimal Number: 332.02401
EAN: 9780446501842
ASIN: 0446501840
Publication Date: April 30, 2008
Availability: Usually ships in 1-2 business days
Shipping: Expedited shipping available
Condition: Brand new, flawless. Bookstore FRESH. Quick Shipping! PLEASE NO TEXAS OR APO/FPO BUYERS.
| |
| Also Available In:
|
| Similar Items:
|
| Editorial Reviews:
Product Description
Most people know that there are 70 million Baby Boomers in America today....but what is less known is that there are approximately 100 million people in America between the ages of 16 and 30. This generation has just entered, or will soon be entering the work force. And they have no idea how to invest, save, or handle their money.
Young people today come out of school having had little or no formal education on the basics of money management. Many have large debts from student loans looming over their heads. And many feel confused and powerless when their pricey educations don't translate into high paying jobs. They feel that their $30,000-$40,000 salary is too meager to bother with investing, and they constantly fear that there will be "too much month left at the end of their money."
Douglas R. Andrew has shown the parents of this generation a different pathway to financial freedom. Now Doug and his sons, Emron and Aaron - both of whom are in their mid-20s - show the under-30 crowd how they can break from traditional 401k investment plans and instead can find a better way by investing in real estate, budgeting effectively, avoiding unnecessary taxes and using life insurance to create tax-free income.
With the principles outlined in Millionaire by Thirty, recent graduates will be earning enough interest on their savings to meet their basic living expenses by the time they're 30. And by the time they're 35, their investments will be earning more money than they are, guaranteeing them a happy, wealthy future.
|
| Customer Reviews: Read 10 more reviews...
 "Millionaire by Thirty" essentially Ponzi scheme October 11, 2008
E. Fisher (Somewhere, Outthere)
First off let me start by making a statement about the author. When I was searching for a website for his "financial services" firm, other than the "missed fortune" website that was set up specifically for his books, what I came across was the website "Bay Area Family Wealth Institute" which I assume is the business site for Mr. Andrews' firm. I wasn't able to find anything concrete on it that really said what services he actually offers, nor was I able to find anything that indicated what his credentials in personal financial advice are (save for a cryptic statement that he has "experience in business management, economics, accounting, financial and estate planning, and advanced business and tax planning"). The site says he's the president of "Paramount Financial Services" but the only Paramount Financial Services website I found, which is out of Arizona, claims to specialize in "a wide range of commercial equipment financing & leasing programs to meet the changing needs of our valued clients. Our competitive programs help established and start-up companies to acquire new and used equipment for their operations". If this is Mr. Andrews' company, which I doubt, it seems to be in a business that is of little relevance to the individual personal investor.
VERDICT: Unable to verify Mr. Andrews' actual credentials or experience, or in fact what services he actually provides or how he makes a living other than through the sale of his books. While this in and of itself doesn't necessarily mean that the advice in his books is wrong, it should be the first red flag that one should use extreme caution when considering his strategies.
Now for the actual content. Essentially Andrews' says that people should buy a house, and then when the house gains in value in just a couple of years they should then refinance the equity and the appreciation out of it and hold absolutely none of their equity in their home. Essentially using their home as an ATM. What should you do with that money you pull out? Andrews' keeps advocating investing it in a cryptic "side account" that is no risk high returns and tax free (I won't try to keep you in suspense like he tried, it's Universal Life insurance he wants you to buy). More on that in a moment. First I want to analyze the first part of this strategy.
If you've been following this strategy for the past few years, I guess you must owe a heck of a lot more on your house now than it's worth. In fact, you may be one of the individuals who cut their losses and walked away from their, let's face it, sub-prime mortgage. If not, you may find that you owe not only 10% or 20% more on your house than it's worth, have no equity in the house, and still are paying 6% or so on the mortgage rate. Whether or not your "side fund" is paying a "higher rate of return" or despite the fact that your mortgage interest is tax deductible (and I'll point out here it's just the interest that is tax deductible), you're at a point now where your property is a completely insolvent asset and that Universal life policy "side fund" probably carries a hefty surrender charge still so it will be hard and expensive to draw your funds out if needed. The money train has come to a complete halt.
And even if home prices weren't dropping, Andrews' conveniently forgets to mention anything about a little thing all home buyers know about called closing costs. When you refinance a mortgage, you pay a fee which can equal around 2% or so of the total amount refinanced. Therefore, if you have a $100,000 that you refinance every 2 years using this strategy, you're adding the equivalent of 1% annually in fees onto your mortgage expenses. Therefore, if after the tax deduction of your actual mortgage interest rate is 4.5%, with a refinance every couple of years it's actually an effective rate of 5.5%, or a savings of half a percent with your deduction. That tax deduction doesn't seem so significant now, does it?
But wait, Andrews' tells us that the Universal life policy will net us around 9% annually. Yes, but even if that were true that's a realized gain of 3.5%, which is close to what I can get in a high yield savings account from a number of reputable online banks. True the bank gains are taxed, however I'll argue that the average return from the Universal Life policy is probably NOT a guaranteed 9%. From what I've read of Univeral Life policies, you pay a hefty up-front commission to set up the policy (your insurance agent might pocket an immediate 6% of your money, so that's a 6% loss to you right out of the gate) and the administration charge on the policy might equal around 2% annually of the value of the policy. Plus, you have to regularly pay your premium so that it won't lapse. So essentially even at a 9% gain, it would take a few years before the insurance agent's commissions were paid for and you would break even, and once you actually started gaining it would likely be around 1 to 1 1/2 % annually. So now, you're paying your mortgage that's worth more than the house, you're paying the premium to maintain your "side fund", and you've just paid your insurance agent a fat commission. Wow, you're well on your way to becoming a millionaire. If I'm just putting my extra money into a high yield bank savings account I'm getting the same financial benefits without all the hassle of this scheme or the very real danger of jeopardizing the whole scheme because finances are tight one month and I might not be able to pay the insurance premium.
Next, I'll just say ignore any information that Andrews' gives in this book about IRAs, 401(k)s or 403(b)s. I didn't catch him actually lying, but I did several times catch him only half explaining some of the rules and intricacies of these types of accounts. For example, he explains a traditional IRA pretty accurately, that you get a tax deduction on contributions but when you withdraw funds at retirement you pay taxes on those contributions plus the earnings. Then he "explains" a Roth IRA stating correctly that you pay taxes on contributions to a Roth. What he fails to make clear is that when you reach retirement age and withdraw funds, your withdraws of both principle and gains are tax free. Because of a wonderful little phenomena that anyone with a little financial saavy knows about and loves called compounding, over a 30 year investment horizon the largest portion of a tax deferred or tax free account will be the gains with the principal equaling a small part (ie. you may over the period of your working life contribute $100,000 to an IRA, but your account is worth $1 million). This is a significant advantage to the Roth, and a significant tax savings for a retirement investor, and to pretty much not explain this fact is what I'd call a lie of omission. Through his poor explanation of the Roth he gives the impression to the reader that Roths are taxed on both ends, contributions and distributions. That's simply false.
Finally, one other point I want to address is his fuzzy accounting logic. In one point of the book he explains how if you own a $100,000 home free and clear, you have a $100,000 asset. However, if you mortgage that home for the full amount, you have now $200,000 in assets. This is absolutely correct from an accounting standpoint, but it's extremely misleading to a layman and here's why. Asset value is determined by an equation called the accounting equation. It's simplified version is:
assets = Liabilities + Equity
In our example we begin with:
$100,000 home (asset) = $0 mortgage (liability) + $100,000 (home equity)
If we mortgage the home, our equation becomes:
$200,000 home & mortgage funds (assets) = $100,000 mortgage (liability) + $100,000 mortgage money (equity)
So you see, while it's true as Andrews' says that borrowing your home's equity will double your ASSETS, ASSETS are just the things of value under your command that are either owned by you or borrowed by you. It is your EQUITY that measures your actual wealth, the worth of what you own. Let's look at the accounting equation again and restate it:
IF assets = liabilities + equity, THEN assets - liabilities = equity AND assets - equity = liabilities
So my final recommendation is, don't follow the advice of this book. It's just bad advice, it's a Ponzi scheme that relies on you getting paid from the money that other insurance company customers are paying for their insurance policies. For someone to have to "earn" all that money so "easily", someone else has to be suckered out of it. One of the first rules of wise investing is "if it sounds too good to be true, it is". Don't believe anyone who tells you that they can get you tax free high returns without any risk (unless they also admit that it would be from breaking the law).
Just a couple other quick words for fellow reviewers: If you gave this book a high rating and start your review with "I don't know anything about investing, but..." then I recommend you do some research on traditional finance so you understand just how unsound this advice is based on actual knowledge of the financial products that Andrews' talks about, despite how good he makes it sound. May I suggest "The Road to Wealth" by Suze Orman. Whether or not you agree with Suze's advice, this particular text goes into pretty good detail explaining various aspects of finance and how certain financial products and accounts work. Now, for those of you reviewers that gave this book 5 stars and defend it vehemently, but you only have one review attached to your user name...well gee, when I write a book I think I'll make up a bunch of false accounts on Amazon and defend my own book against criticism too. Taking out all of the ratings so far here on Amazon for this book that come from 1 review users (both the good scores and the bad scores, for fairness' sake) I calculated this book to have really gotten about 2 stars. It's just really, really, really, bad advice.
 A classic account of the quickest route to early financial independence September 6, 2008
Midwest Book Review (Oregon, WI USA)
0 out of 2 found this review helpful
Douglas R., Emron D. and Aaron R. Andrew both author and narrate a classic account of the quickest route to early financial independence in MILLIONAIRE BY THIRTY: THE QUICKEST PATH TO EARLY FINANCIAL INDEPENDENCE, a survey of the path to financial freedom. Father Doug Andrew didn't want to see his kids on the usual financial treadmill for the next forty years so he passed to them his secrets of success - and all became winner, starting out of college with entry-level jobs paying about, $30 kay a year and following steps outline here to each achieve a net worth of over, $1 million.
Best ways to get into debt August 14, 2008
FW
1 out of 1 found this review helpful
As the previous reviewers have mentioned, the entire book reiterates the same crap, buy as much real estate as you can, refinance all of your real estate until your brains turn into mush and invest the proceeds into non-realistic 'risk free' savings vehicles that yield 8-10% (please find me a savings account that does this). The content of the book may indeed allow a person to have a million dollars by thirty, but they will end up having two million in debt. The end of the book speaks about putting money 'safely' into life insurance accounts, where you can reap tax free benefits. I could not believe what I was reading. I highly recommend NOT buying this one. Its only a good read on what NOT to do with your investing dollars.
Fails to Deliver on the Title July 21, 2008
Jack McGrath (Cyberworld, USA)
6 out of 7 found this review helpful
If you have a great business model no problem being a millionaire by 30. Buying houses with maximum leverage and investing the difference in a max funded life insurance policy may do it by 50. That for most, especially the young is a big maybe.
You only need to read the paper or watch the news to see the result of people who borrowed too much to buy a house or three. Most problably had the income to pay the loan at the time it was originated. Then the unthinkable happened, job loss, illness, divorce, or life. Leverage is a double edge sword, and if you don't have a good cash surplus it can wipe you out.
The second glaring problem is the rationale on why other investments are poor compared to Indexed UL. The author glosses over the fact that many insurance contracts are kept for only a few years. The same way people jump in the stock market when it is hot and pull money out when it is cold. Again, view articles on people taking money from 401k plans to pay bills.
Then the pitch for Indexed UL is worse than having an agent sitting in your kitchen. I have two Variable ULs myself, so I am not completly opposed as part of a balanced portfolio for long term cash. But everything, no way and here's why. The expenses are the highest of almost any investment product on the market. Even in the best scenario Indexed UL will have 1% per year cost for insurance and the same or more for the investment fees. You can buy an Index of stocks and pay less than 1/4 of 1% in fees each year. Pay the lower capital gains tax rate when you sell, and cash out at any time. Sure you can borrow from your UL and pay no taxes, but you still pay interest on the loan. So if the interst rate is 1%, after 15 years you would have paid the full capial gains rate of 15%. You keep paying interest as long as the policy is in force. If it lapses, you are hit with a tax bill on the gains. It is taxed at the higher ordinary income tax rate, not the lower capital gains tax rate.
So to park some long term cash, protect your family, or leave some money to charity UL is great. But balance it with a full portfolio including cash. Better to borrow a reasonable amount on a home and fund several investments on the side if you want to get and stay rich.
Best $ Book Ever! June 13, 2008
Jacob Lindenmuth (York, PA)
2 out of 7 found this review helpful
This book opened my eyes in a way that they've never been open before! This book is so easy to read, but it doesn't make you feel dumb for not being financially literate. As soon as I picked this book up I couldn't put it down. Like a suspense movie - I wanted to find out what the Andrew guys were going to say next. Just about everything you need to know about finances and how to get ahead in this crazy world, can be found in "Millionaire by Thirty." This is a must read for anyone.
|
|
|
Navy Advancement Study Guide
Top Selling Navy Enlisted Books | |
