I think about money all day long.
The fruits of that thinking are contained in this book, and I am confident that this book will completely change your existing ideas about money and investing.
This means that it contains concepts that are different from existing common sense.
This book thoroughly analyzes the essence of money, which 95% of people never realize from birth until death.
--- p.10

Because of these shortcomings, human productivity has remained in a structure that has made it difficult to significantly increase for a very long time.
Division of labor in each field according to each person's ability is the most productive method, but in the barter era, a certain degree of self-sufficiency was essential due to the limitations mentioned above.
This structure lowered the productivity of the entire group, and eventually, to overcome the structural limitations of barter, mankind created a groundbreaking invention called money.
The invention of money eliminated all the disadvantages of barter, dramatically increasing the productivity of humanity as a whole.
Money made it possible to exchange the goods each person produced easily and conveniently, without being restricted by the structural limitations of barter.

--- p.33

There is a word that suddenly became popular as house prices and stock prices skyrocketed.
The new word 'sudden beggar' refers to people who were only saving money in the bank who suddenly became beggars overnight as the value of their assets skyrocketed.
However, it would be a mistake to think that the lightning beggar really appeared like a bolt from the blue.
No one became poor overnight.
The phenomenon of people who diligently save cash without any assets becoming poorer has been going on for a long time.
It's just that people couldn't feel it with their skin.

--- p.53

The gap between the average net worth of the top 20% and bottom 20% of Koreans is widening, jumping from 100 times in 2017 to 167 times in 2020.
What about the future? Could the current situation suddenly reverse itself and the gap between rich and poor narrow? The likelihood is extremely slim.
Because the value of money continues to fall and asset prices continue to rise, the rich will continue to increase their wealth by buying new assets with that money.
In this situation, anyone who wants to become rich must do something right now.
--- p.56

Following currency, housing also experienced significant fluctuations.
In March 2022, when quantitative easing ended, the consumer price index rose 8.5%, but during the same period, the US home price index rose by nearly 20%.
It was the same in Korea.
South Korea's consumer price index rose 3.7% in February 2022, but housing prices rose by over 12%.
As mentioned earlier, various statistics are 'smoothed' to make inflation appear as small as possible, so it is understandable that inflation is understated. However, it may be difficult to understand that housing prices have risen so much compared to inflation.
--- p.72

In all human societies, whether medieval or modern, money flows from the upper classes to the lower classes.
The company takes money and pays its employees, the employees use that money to eat out, and the restaurant owner takes that money and pays the part-time workers a salary.
In this way, money has a class structure that constantly flows from top to bottom, from A to B.
The rich and powerful, corresponding to A, are located close to the money issuing machine, while ordinary people, corresponding to B, are located far from the money issuing machine.
So by the time money flows from the upper classes to the lower classes, widespread inflation has already devalued the currency, leaving most ordinary people with significant losses.
--- p.149

No matter how much interest rates rise, in most cases you will need to use leverage.
A simple calculation will quickly reveal the reason.
For example, let's say you invested in the S&P 500 ETF, which holds 500 of the most representative companies in the United States.
The average annual return of the S&P 500 is 12%, assuming dividends are reinvested.
Of course, there are times when it is higher, lower, or even negative, but it doesn't matter because you're not investing for 1-2 years.
Sometimes people ask whether stock prices don't fall during periods of rising interest rates, but that's not necessarily the case.
Stock prices are unpredictable in the short term.
Since leverage is not a major issue if used safely, you should do your calculations assuming a long-term investment.

--- p.196

Growth stocks and cryptocurrencies are representative examples of high-growth assets that are invested in based on future value rather than present value.
Growth stocks are stocks that do not currently generate much income, but whose price is formed based on expectations that the company will grow significantly in the future.
For example, a stock that currently earns only $1 per share and is priced at $100 may seem ridiculously expensive, but what if the stock earns $10 per share in five years?
It would be well worth the investment, even if it meant enduring the five-year wait.
The stocks of these companies are called growth stocks.
--- p.247

Another problem is water-riding, which is also a phenomenon caused by the obsession with average prices.
If a stock you bought for 100 won becomes 80 won, and you buy more stocks of the same amount, the average price will drop to 90 won.
In that case, I think that what was once a 25% increase would now be broken even with a 12.5% ​​increase.
So, every time the price goes down, you keep riding the wave.
The only time it's okay to ride the wave is when the fundamentals are good, but the price is falling due to external factors or market conditions.
The water riding mentioned above refers to a wrong investment method that is done with the sole intention of lowering the average price to lower the price that can be used as a break-even point.
There is no need to ask how this is distinguished.
Just put your hand on your heart and ask yourself:
Because you can fool others, but you can't fool yourself.
--- p.287

The reason service business revenue is important is that it provides steady and predictable income.
Most of Apple's recent services, such as Apple Music, Apple TV+, and Apple Arcade, are subscription-based.
Subscription models can be expected to generate consistent revenue because customers who pay this month are more likely to pay next month and the month after that.
Having a steady stream of predictable income can be a huge boost to running a business.
Because there is no major difficulty in planning expenses, new investments can also be made.
New investments can further increase profitability, creating a virtuous cycle.
This is precisely why Apple was able to become the world's largest company by market capitalization.
--- p.322

The risk-free interest rate refers to the rate of return on an investment that can yield profits without any risk, and is generally used as the yield on 10-year government bonds.
Expected returns vary depending on each individual's investment philosophy.
Unless the institution announces a target stock price to the public, you can determine whether the investment is worth the investment you desire and then carefully input your desired rate of return.
If I input the rate of return I want and it doesn't produce the growth potential I want, then even stocks that others say are good are meaningless to me.
--- p.345

Price is a social agreement, and since the subject of that agreement is people, the subject of price is people.
Gold is shiny and aesthetically beautiful, so does it have intrinsic value as a gem?
The subject that values ​​a jewel is also a person.
All things that are said to have intrinsic value in gold are ultimately recognized as having value by people.
This means that it does not have any intrinsic value in itself.
And that final agreement is the price.
If Bitcoin becomes widely accepted as the ultimate payment method in the digital age, that will immediately become Bitcoin's intrinsic value.
Its value will increase as it is recognized by people.
--- p.365

There is a saying in the American financial world that even if a gold bar is placed in the middle of an office, no one will pick it up.
To American financiers who firmly believe in efficient market theory, if the gold bars were truly valuable, anyone would have taken them, so at least to them, the gold bars are not that valuable.
Likewise, a person who believes in efficient markets would not pick up a 50,000 won bill even if it fell at his feet.
If that note had any value, someone would have already taken it.
This is what actually happens in the market.
A situation where the price of an asset with high future value is undervalued is not much different from having money lying around right in front of you.

--- p.388