Book review: The Millionaire Maker
Loral Langemeier claims that she can turn anyone into a millionaire. In her recent book The Millionaire Maker, she writes:
You can give me someone who's severely in debt, you can give me a single mom on a low income, you can even give me a guy who's living a big lifestyle on fumes. I can take all of them and make them millionaires.
The Millionaire Maker attempts to codify Langemeier's “proprietary Wealth Cycle Process”. (That's how she writes it — with capital letters. Langemeier is big on capitalized jargon, tossing around terms like Financial Baseline, Gap Analysis, Freedom Day, Cash Machine, Wealth Accounts, Forecasting, Wealth Account Priority Payment.)
Langemeier believes there are better places to put your money than in mutual funds. (She calls the buy-and-hold method “park and pray”.) She advocates an active role in accumulating wealth, particularly through entrepreneurship and real estate.
Langemeier's advice is reminiscent of Robert Kiyosaki's Rich Dad, Poor Dad, but with more examples. Where Kiyosaki is vague, Langemeier offers seven case studies. Each chapter emphasizes a different aspect of her method, focusing on a family who wants to achieve a financial goal. Some of the families have millions of dollars in assets. Some have almost nothing.
With the correct approach, Langemeier says, anyone can achieve her dreams. She emphasizes a One-Year Freedom Day, a day on which you will have escaped your current financial situation. This means different things for different people. To discover what it means for you, you need to ask yourself some questions: What is your current financial situation? What do you want? What skills do you have? How can these skills help you get what you want?
It's all very inspirational. But still — sometimes she sounds like she's pitching a get-rich-quick scheme.
Once you set the Wealth Cycle Process in motion, you can be on your way to having everything you ever wanted much faster than you ever thought possible.
Langemeier is adamant that her system is not a get-rich-quick scheme. She notes that her method requires hard work and sacrifice. She espouses many tried-and-true personal finance concepts:
- She preaches the “pay yourself first” mantra.
- One of the first steps to her system is to get rid of bad debt.
- To that end, she presents a modified debt snowball.
- She also asks people to keep a budget. (Though she calls a budget a Forecast.)
- “Start now!” she says repeatedly.
- She encourages diversification, though her concept of diversification is different than most.
- Langemeier decries the lack of financial education.
- She warns that it's a poor idea to “look pretty and stay poor”.
The Millionaire Maker offers conventional advice wrapped in unconventional garb. Langemeier encourages wealth through entrepreneurship. She preaches action. She emphasizes teamwork. “There's no such thing as a self-made millionaire,” she writes. She believes that for real wealth to occur, one must obtain help from a team comprising a CPA, a lawyer, a financial advisor, and various mentors.
Some of Langemeier's advice is almost scary. She promotes the use of home equity — hundreds of thousands of dollars at a time — as a source of money for business ventures. She sometimes recommends cashing out retirement savings to do the same. She would argue that it's easier to make money by starting a business based on your knowledge and passions, than it is to leave the money to the whim of the stock market.
I think these are noble sentiments, but I'd want to be damn sure I knew what I was doing before I pulled six figures out of my house to risk on a start-up. I'm all for entrepreneurship, but this seems risky. And what are these 40% returns she mentions? Sign me up!
The Millionaire Maker is a mixed bag. While it preaches what ought to be preached, and Langemeier provides more specifics than some authors, her message sounds hollow. I want some evidence of her success. Not everyone will be moved by her love of entrepreneurship. But for some — myself included — this book may be a useful tool. Despite its flaws, I find this book motivational. (In a way, it's responsible for the existence of this site.)
The Millionaire Maker is the sort of book that one ought to read for inspiration; it should not be accepted as the gospel truth. There is some good information here, but there's some stuff that raises red flags, too.