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I shelled $[...]+ bucks on this book and now I regret. This book basically talks about 2 things:

1. Buy a house early, and separate the equity from the house by taking a big mortgage or refinancing often. Now invest the equity in some "side fund" which earns a bigger return than mortgage interest.

The priciple works, but it largely depends on the appreciation rate of the house. In boom time earlier this century, it was very feasible. That's probably why Doug's 2 sons (co-authors of this book) made a million. This advice is not universally applicable because real estate appreciation is very much location and time sensitive.

2. One investment vehicle exceeds all the others because contribution/accumulation/districution are all tax-free. Sounds attractive? Definitely! The first 7 chapters talk so much about this myterious "side fund" which is low risk and high return. I held my curiosity and discovered in the end that it's MFTA (max-funded, tax-advantaged) life insurance contract. "If it's properly structured", the authors say, you can be tax-free in all 3 phases mentioned above. I've found the description of this cash value universal life insurance (indexed or fixed) very confusing. Looks like it's not very straighforward to implement, and, we never know how future legislation will affect this strategy. For a common investor like me, I wouldn't try this strategy without a complete understanding of it.

Also, the book is not very well structured. Lots of repetition of the same stuff (guess there are 3 authors writing it). Sometimes it over simplifies financial matters by summarizing everything into 3 rules.

One plus is, you can access on-line resources for free: [...]. However, lots of links are still unavailable.

All in all, it doesn't contain solid financial advice that I was expecting and it largely hinges on past performance (e.g. real estate appreciation rate shoots through the roof) rather than focusing on future possibilities.
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on October 11, 2008
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.
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on April 20, 2008
The main idea is to own multiple real estate properties all of which are financed at 100% at low interest rates while the excess value of the homes is invested in higher yielding (after tax) investments.

The assumptions about home appreciation rates, interest rates (borrowed and invested) and income tax rates are not realistic in today's environment in my opinion. I don't see how 18-29 year old individuals could apply these principles.

There are a few interesting ideas here and if you can get them to work, please let us know your methods.
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on February 3, 2010
This book is a sales pitch that keeps repeating the same thing (some times the exact same sentence) every few pages. In addition to the poor editing, the financial advice proposed in this book is very unrealistic:
- expects house values to increase at least 8% year over year FOREVER
- assumes an investment strategy that consistently returns 10+% per year with no risk

Besides the unrealistic expectations of return on investment, the strategy completely disregards the risk factor. It relies on a eternally rising real estate market at 8% or more, not accounting for market fluctuations, in which case the homeowners would be underwater and very likely to default. It also assumes rental properties as easy and fixed income, without accounting for late rents, or periods without renters, which would again cause the homeowner to not have funding to pay the mortgage.

This book advocates several of the very risky financial strategies that led to the recent real estate meltdown, and I wouldn't recommend anyone to follow it.
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on December 31, 2009
The only millionaires by 30 are those like Mr. Andrew and his sons who sell Universal Life policies to unwitting consumers.

I bought a UL policy 16 years ago from Mr. Andrew. He showed me the unrealistic returns one could make based on a 12% annual return to get me to buy.

His book talks about returns of 6, 7, and 8%. I've never made those types of returns. More like 3%.

Also, the original policy he sold me was with Kentucky Central Life which promptly went bankrupt two years later. Jefferson Pilot took it over and then they got bought out by Lincoln National.

Mr. Andrew sold himself as a financial planner and said he contacted his clients once a year. Unfortunately, I've never heard from him again. He was too busy making his millions to bother.
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on April 11, 2011
I bought this book recently. Thankfully it was at a now bankrupt bookstore and so I got it at a discount. This book is terrible.

Basically, you read through about 7 or 8 chapters of fluff and buildup. The authors trash financial wisdom - you know, crazy stuff like don't run up big debt on homes and pay off student loans quickly. They keep telling you about this mysteriously awesome investment strategy. And about 10 chapters in they finally tell you that you need to buy life insurance with the equity you pulled out of your home.

It's important to note that I believe this book was written in 2006. So, viewing it on the other side of the housing bubble shows you truly how much this book is completely "snake oil."

The only thing I got from this book was that it may be more important in some instances to have liquid cash than to pay certain debts off quickly. Other than that, this was totally worthless.

I wish I could give this book zero stars. It was a complete waste of a Sunday afternoon. You're much better off with a a book by Dave Ramsey, David Bach, or Gail Vaz-Oxlade.
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on February 1, 2010
I listened to this book on tape over the weekend, listening to several sections more than once. My advice about this book, DON'T do it. It contains some basics for understaning financials in general, but do NOT try this personal pyramid scheme on yourself. I am glad to see that other reviewers have already explained the flaws.

The entire premise of wealth-building as presented in this book is a house of cards with no real wealth supporting it. The "wealth" is the equity in a home, or homes, regularly re-mortgaged to keep all the equity extracted. The extracted equity is then used to purchase universal life insurance contracts. A few years later, you then borrow against the accumilated value of the insurance contracts, tax free it is said. That's it!! The risks and costs of this scheme are presented as being virtually none. What a flimsy scheme to perpetrate on young adults.
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on July 7, 2009
This book would have been relevant if the following were to hold true forever:
a) the real estate market will always appreciate
b) portfolio of universal/whole life will always outperform the market

Had I bought this book in 2007 and invested as per its principles then - I would have lost a lot of my net worth.
The book also claims whole life/universal life is much better than term but does not outline impact of investment fees and performance of assets within the whole/universal life portfolio. This read was a waste of time (although it did make me research into whole/universal life)...this is not for me. Better advise was in the WSJ guide for new parents that outlines pros and cons of term vs universal/whole life. The advise in the WSJ book is much more realistic and practical.
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on May 23, 2012
I'm a recent finance major graduate and fully understand the idea arbitrage. Borrow money at lower rates and invest it at higher rates. Simple concept really, banks do it with customers' deposits and GE does it with bonds... The problem is that this guy is pitching: mortgaging your house (lower rate) and buying universal life insurance (alleged higher rate of return) with the borrowed money. The real problem I have with this is the fact that this guy does seminars all over the country for mortgage brokers and insurance salesmen. This book is pitched to YOU (in my case an unsuspecting purchaser of personal finance books), but in actuality this book is merely a tool he sells to his real customers: mortgage brokers and insurance salesmen. It's no wonder mortgage brokers and insurance salesmen pass these things out like candy. It's just another sells technique for the mortgage and insurance industries. The commission on universal life insurance for the agent that pushes a policy on you is like 90% of the first year's premiums and 6% of the premiums every year after that. These fees really hurt the returns on these policies and continue to for the next 20 or thirty years. You basically lose 90% the first year.... God forbid you miss a policy payment or are forced to cash it in for pennies on the dollar. Don't buy what this guy is selling and kick the insurance guy that gives you this book in the nuts. Personally I don't think you should pay your student loans or LOW interest mortgages off early either, but never buy a universal life insurance policy!!! Use your extra money for a down payment on a rental property in a strong neighborhood, just make sure you do your research on real estate investing first. In this tight mortgage market (many people have a hard time buying personal homes) and depressed housing market residential rental is looking pretty good. Buyer Beware!!!

P.S. I'm about to go to Barnes and Noble and try to get my money back for this one. Never actually did that for the thirty or so personal finance books I've bought. Should have came to Amazon first and read these reviews... Wish me luck!
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on June 10, 2008
This book is nothing but a sales pitch for Indexed Universal Life Insurance, which is conveniently offered by the author's company. And, by the way, if you buy one of these programs, their agents make a hefty fee. So not only are you spending money on this book, you will put more money into their pockets by buying this insurance program. Do some research on Universal Life Insurance (specifically the one mentioned in the book) and you'll uncover all the facts about it.

I will say the book had some ok ideas about investing in general, but save your money on this book and buy a "Rich Dad" book series instead.
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