Two Books Want To Help You Become Rich: "Maui Millionaires for Business" and "The Last Chance Millionaire"

Despite the somewhat similar titles, "Maui Millionaires for Business" and "The Last Chance Millionaire" take two very different approaches to guiding your financial decision-making.

"Maui Millionaires for Business" is the follow-up to the successful "The Maui Millionaires" book. This second book combines two somewhat different topics: starting a business and wealth creation "secrets."

About half of the book is a very basic tutorial on how to start and run a small business. While there is some useful information, it is generally very high-level, rudimentary concepts. They are, quite frankly, the types of basic things that if someone didn't already know before reading this book they should not be starting or running their own business. For example, under the heading "Sales Strategies" is the suggestion that you "lower your prices" but only after "running the numbers."

So how does one start a successful business? "Maui Millionaires for Business" tells you to focus on operations, sales & marketing, people and finance. This is of course all true but because it is so broad (not to mention obvious) is is generally useless for its intended purpose. It is like telling a football coach that he needs to focus on offense and defense if he wants to win the big game. As stated above, if someone doesn't already know that sales & marketing are important to running a business then they really shouldn't be starting one.

This is not to say that there isn't some valuable information in the book and the authors clearly know what they are talking about. One example is the section on the "12 Characteristics of the Ideal Opportunity." Another good section is the "10 Biggest Blunders". But these are too few and far between for us to recommend the book as a how-to start/run/manage a business and there are so many other business books that do this much better.

The second part of the book, and presumably the reason it was written, is the authors' secrets for becoming wealthy. They tackle this in a couple of ways. First, and regretfully one of its central themes, is for you to become wealthy by founding and building a successful business. Frankly this scares me. The majority of new businesses fail (estimated to be around 80%). The worst reason to start a business is an attempt to become wealthy. Financial rewards in a new business are a side-effect of a person who is driven to success by an idea they (and others) consider phenomenal and for which they possess some unique skill set and resources to accomplish. As you can imagine this doesn't come together all that often. If someone is starting a company because a book told them that would be a good way to become wealthy it is almost certainly doomed for failure. In short, starting a business is a very risky way to try to pay for one's retirement.

In addition to starting a business, the book tells you that you can create wealth by investing in someone else's start-up. The book tells us that "This has worked for hundreds of thousands of other investors who've made billions just this way." In reality this is called Venture Capital and it is risky and the domain of experts who regularly review hundreds of start-ups deciding which few to deploy their capital. Even with this selectivity they are wrong more than they are right but because they invest in enough start-up businesses a few big winners pay for all of the losers. This type of portfolio risk balancing is typically not available to small investors who lack the financial resources to invest in enough start-ups to spread the risk and it wasn't even mentioned in the book.

Overall and despite several positive reviews in Amazon, I don't think the book is the right choice for most investors. Too much of it points people towards risky ventures that if they fail could leave the individuals in a very difficult financial position. Certainly starting businesses and investing in other people's start-ups has a place in the world. But for the people for whom that strategy is right, this book is far, far too rudimentary to be of much help. All that said, the book is certainly cheaper than the authors' seminars which they report cost $30,000 and sell-out a year in advance.

Amazon link: The Maui Millionaires for Business: The Five Secrets to Get on the Millionaire Fast Track

Where the "Maui Millionaires for Business" is about getting rich regardless of how young or old you are, "The Last Chance Millionaire" by Douglas R. Andrew is focused solely on insuring a comfortable retirement and is written for pre-retirement Baby Boomers. In fact it bills itself as the "definitive retirement guide for the baby boomer generation."

There should be no disagreement that the Social Security funds most workers have contributed to their entire working lives will not be adequate to sustain the lifestyles to which they have become accustomed. And there is no shortage opinions what is the best strategy to address this expected shortcoming though most revolve around watching your expenses and maxing out 401k/IRA contributions.

In "The Last Chance Millionaire," Andrews takes a very different approach from this conventional wisdom. Andrews tells you not to pay off your mortgage nor put money in your 401k. Instead, he says, you should refinance your mortgage into an interest-only loan and then buy Universal Life Insurance.

I am simply not qualified to evaluate Andrew's approach though I will note that he does include a great deal of collaborating detail. But regardless of his graphs and charts, his ideas are too complex for readers to attempt to implement on their own. Andrews book is best used as food for thought as you deal with your own financial planner who is dealing with your specific situation. One astute reviewer on Amazon observed:

The idea of borrowing money from a home and repositioning the money into cash value life insurance can make sense if you can get a higher rate of return and if you can afford the payment. However, readers need to be aware of the laws regarding the deductibility of interest when you refinance your home, especially if you use the borrowed funds to purchase cash value life insurance - with the contemplation of borrowing from it.

Yes, working with a financial planner will cost money, probably several hundred dollars. And with that in mind, spending an additional $25 for this book so that you are better educated on the topic of personal finance makes it a worthwhile purchase. It's best use would be to prepare you for working with a financial planner and specifically to challenge your them on the advice that they give which will likely be different than what is in this book.

Amazon link: The Last Chance Millionaire: It's Not Too Late to Become Wealthy