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My Thoughts on “The Millionaire Inside”
By JLP | June 9, 2007
I’m sitting here watching CNBC’s The Millionaire Inside, which is supposed to be stocked with a panel of 4 “wealth mentors” who will give you the “secrets” to building wealth. The panel:
David Bach
Barbara Corcoran
Phil Town
Loral Langemeier
I didn’t care for this program. It was full of rah-rah, bad advice, and no substance. They all agreed that saving through a 401(k) plan would lead to a poor man’s retirement. When they weren’t giving out bad advice, they were dishing out vague secrets. For instance, here’s Phil Town’s two rules for investing:
1. Find a good company – something you like.
2. Buy it on sale.
DUH! I’m pretty sure my ten-year old could tell me that. What Town didn’t give was specifics on how you find a good company and how you buy it on sale (maybe his book tells you). What’s “on sale?”
Honestly, the only “mentor” I actually liked was David Bach even though I disagreed with him on his pay-off-your-mortgage-bi-weekly advice. He told the entire audience to call up their banks and enroll in their bi-weekly mortgage payment program. He didn’t mention the fact that most banks charge for this privilege. There’s usually a $400 set-up fee and then $8.95 per transaction, so isn’t cheap especially when you consider the fact that you could send in an extra payment on your own. Not only that, he failed to mention the opportunity cost of such a maneuver.
Finally, the real clincher for me was when an older gentleman stood up and said that he retired and put ALL of his money in ONE stock. He then said that that stock went up 1,800% and the crowd oohed and awed and Phil stood up and acted like he was a batter knocking one out of the park. In other words, he was proud of this man’s stupidity. Yes, even though this guy’s one stock went up over 1,800%, it was still a stupid move on this guy’s part to risk his life’s savings on one stock.
So, if you missed tonight’s episode, you didn’t miss anything.
Topics: Miscellaneous | 14 Comments »
June 10th, 2007 at 12:21 am
The problem is that the media loves “home run” narratives. Long, grind-it-out strategies are boring. You see this most clearly with this sort of thing, but you’ll also see it in virtually all political coverage: “problem solving” strategies are winners, while “grind the condition away” strategies are seen as too icky and uncool.
And they probably stacked the audience with ringer “winners” for better television. If they asked the guy and he said he lost his retirement on a stock that tanked, he’d wreck the narrative – at least for this show. Instead, they’ll save the loser for the panel discussion on social security privatization…
June 10th, 2007 at 1:57 pm
Bach did actually mention the costs with the biweekly – he just mentioned it in another segment.
I agree though that the hour was a lot of fluff. Loral just said “start a business” while Barbara kept saying “buy property.” Phil didn’t say anything that would disrupt the sale of his book. I could be on this panel and offer better advice.
Bach was probably the most level headed. None of his advice was hard to understand, easy to achieve, and geared towards a sensible growth in personal wealth.
Too many people think that you can go out and hit that “home run” and watching infomercials talking about $1 properties and stock purchasing software only add fuel to these misconceptions.
They all have valid points – build your 401k, own property, own good stocks, and take advantage of being your own boss. The problem is you can’t get started in one hour of fluff.
June 10th, 2007 at 6:13 pm
I haven’t seen the show, but I know a lot of mortgage companies are now actually offering biweekly payments for free.
When is that show on? I’ve been wanting to catch some money shows….are there any others?
June 11th, 2007 at 12:36 am
I haven’t seen the program, but (not knowing the circumstances) I would not necessarily say that putting all your money in one stock is by default stupid.
If it is the stock of company one fully understands more than anything else than why the heck not? Given of course that one has done own research and posseses relevant industry expertise.
But had the stock been chosen by a blind throw of a dart into The Journal stocks list than the choice was stupid all right.
June 11th, 2007 at 8:33 am
I thought the whole program was very disappointing. I don’t know why David Bach was even there. I know from his teachings that he doesn’t share the overly risky tactics of the other guests on that panel. He looked uncomfortable and out of place.
Also, I didn’t like hearing from the woman who was the real-estate expert. I didn’t like how she referred to people who rent as ’stupid’. I understand that renting is not the best financial choice, but everyone has different circumstances.
June 11th, 2007 at 11:34 am
I’m not trying to be funny. But I truly feel that some of that stuff is staged.
I remember when PHIL TOWN pick a woman out of the sudience ( on the first espisode) and look at her bag and notice it was a COACH bag. So he went on to talk about COACH stock. How did he know what bag she had if it was out of his sight. I just think the whole thing was staged. Same as the man that put all his money in one stock. I think they picked him out of the audience on purpose.
June 11th, 2007 at 11:42 am
The audacity of the network putting on such a irresponsible show is astounding…it is comical if not actually sad!
They repeatedly contradicted themselves and horribly misguided an usually misinformed public. On one hand they said you should be diversified and then promoted the fact that some old guy rolled dice hit the lottery on forest protection. HOW irresponsible is that?
The Guy who stood up as if that old guy hit a homer should be fired immediately.
I guess I will continue to dollar cost average into index funds, make my 11% per year, and be broke when I am 60. LOL.
I wonder which theory Buffett would side with?
June 11th, 2007 at 11:43 am
Moneymonk,
Oh, I’m sure you’re right! At least I hope you’re right because I would hope that a lot more people would be skeptical.
I hated the show but it gave me some good blogging material.
June 11th, 2007 at 11:56 am
Phil Town made my head nearly explode…Wow what a goof…
He congratulates an older guy in his 60’s for dumping ALL he has into Force Protection [FRPT]? Holy smokes. This Phil Twon character should have said, “Well done.” but then went on a tirade for all the folks watching to NOT do that, but he didn’t. That type of behavior from this panel is unacceptable.
Like moneymonk said…This smelled of ’staged’. Soundofgold…How can you say placing ALL of your money into ONE stock is a good thing?
June 11th, 2007 at 1:47 pm
SoundofGold,
Investing all of one’s money in one stock IS stupid – if’s and’s or but’s. S-T-U-P-I-D! Phil Town was an idiot to make that retired guy out to be a hero.
June 11th, 2007 at 4:02 pm
I agree, I had to turn off half way through as I could not believe what I was watching. How can CNBC ever believe this was a responsible use of their airtime. This show was more akin to a late night paid advertising spot, full of hype, one sided opinion, no substance and an audience that seemed to suck it all up. The only thing missing was the phone number to call to buy the book, DVD and the ‘I’m rich your not’ T Shirt. Although I missed the end so maybe they did.
June 12th, 2007 at 11:15 am
Having not seen the show, isn’t putting on 4 “experts” going to confuse the audience? Everyone has a different way to make money and, if you put 4 different experts on 4 different ways to make money, you are really confusing the audience and doing more harm than good to the viewers.
Gotta love tv.
June 29th, 2007 at 4:05 pm
I just watched the 2nd in the series, and it was even more painful than the first. It was so repetitive that I couldn’t even finish watching it!
July 4th, 2007 at 1:36 pm
I just finished watching this show and I was outraged at the vague advice these “experts” were giving. All the realstate expert was do is talk about how she made her millions but not really how do it if you are on a tight income. Also, I was disgusted on how she said it’s fine if your a spender and you don’t have to change your spending ways to make money. Unbelievable! The other women basically said go find money – How? by getting another job? Every one except Bach, had confusing and worthless advice for the average person sitting at home. I was looking for more tips that were realistic, like Bach’s advice on upping your contribution to your 401K.