“Why do I keep getting poorer no matter how hard I work to save?”

Compound interest, diversified investments, owning a home… In an era where the formula for wealth no longer applies,
Rob Dix, the UK's top investment mentor, offers a realistic wealth strategy.

The MZ generation is said to be “the first generation poorer than their parents.”
It is not a phenomenon unique to Korea that those born in an era of abundance but starting their social lives in an era of low growth are experiencing economic difficulties due to declining employment and rising asset prices.
“If you want to become rich, start by saving” “It is safe to invest for the long term with compound interest” “You have to buy your own house first to become rich”… .
Rob Dix, Britain's top investment mentor, says it's time to abandon the wealth formula that worked for our parents' generation and develop a new wealth strategy suited to the changing financial landscape.
Rob Dix, host of the UK's most popular economics podcast [Property Podcast] and bestselling author, dissects the false beliefs and illusions about money in his new book, Seven Myths About Money, based on 15 years of in-depth research into the economy and asset markets.
The book is not limited to mere criticism.
It overturns deeply ingrained misconceptions about "savings," "early retirement," "compound interest," "buying a home," and "diversified investment," and suggests ways to design your own investment strategy to overcome the low-growth era.
It also contains practical investment strategies that can be applied in real life, including how to assess your investment style from a three-step perspective of protection, maintenance, and improvement, strategies for protecting assets from inflation, how to use leverage to increase profits even with small amounts, and the principle of income growth that is more powerful than compound interest.


Above all, this book does not recommend extreme frugality or reckless investment.
Instead, it helps design a sustainable 'wealth system' that anyone can follow, from MZ generation workers to those nearing retirement.
As the author's philosophy goes, "Prepare for the future, but don't sacrifice the present."
If you cling to the laws of the past, you will be poorer in the future.
It's time to abandon the old ways, learn the new rules of the game, and develop a practical wealth strategy.
This book will be the most realistic and powerful guide to start with.

There is one area in the life of an ordinary person that still has not improved.
It's money. In the 1960s, anyone who graduated from high school could get a job without a college degree.
Since I didn't need a degree, I didn't have to take out student loans.
I could run a normal household with just one income, and if I saved my salary well, I could even buy my own house.
During this period, the value of all assets, including homes, skyrocketed.
Moreover, many people lived on pensions linked to their final annual salary after retirement, regardless of the performance of the financial market.
I could live a financially comfortable life simply by following my colleagues at school and work and copying their financial habits.

But now things are different.
If you follow the set path, you will end up going to college even though you have no particular passion for academics.
This is because most workplaces require a college diploma as a condition of employment.
After graduation, you may spend most of your working life paying off your student loans.
Then, you realize that you have to work to support your family, and that you will have to be well into your 30s to be able to buy your own home.

If you want to enjoy a comfortable retirement, you need to save hard, buy an expensive house, and make investments.
We must pray that asset prices continue to rise.
Are you struggling to retire? You're not alone.
As of this writing, the UK's workforce aged 70 and over has increased by 61 per cent over the past decade.
The United States is also expected to see a 96 percent increase over the next five years.
Between 2004 and 2019, the proportion of the working-age population aged 55 and over increased from 12 percent to 20 percent across Europe.
---From "Prologue_New Game, New Rules"

Of course, we should continue to save, but we should not expect that it will dramatically change our lives or secure our future.
In other words, rather than giving too much attention to saving, it's better to focus on other ideas explored in this book.

The approach to saving presented in this book begins by exploring the fundamental reasons why we spend money in the first place.
We are implicitly expressing that we value the things we buy more than the money we pay for them.
You may not always feel that way (few people happily pay their electricity bills), but if you make a voluntary consumption decision, it's always true (it's better to spend money than live in the dark).

In theory, every time you spend money, your quality of life should improve.
Otherwise, you shouldn't have made that deal.
No one is forcing you to spend money, but you've probably realized that you often spend money in ways that don't improve your quality of life.
---From "Chapter 1 [Savings] Why Do I Get Poorer Even If I Work Hard to Save?"

Acknowledging and understanding these three conflicting motivations—protection from disaster, maintenance of current lifestyles, and improvement of financial status—holds the key to dramatically simplifying investment decisions.
Because any investment will satisfy only one of these three motivations.

For example, a cash emergency fund satisfies the motive of wanting to 'protect' from disaster.
Speculation about new cryptocurrencies fuels the desire to 'improve' one's financial situation.
Diversifying your investments in the stock market is motivated by a desire to "maintain" your current lifestyle, while owning stocks in a company is motivated by a desire to "improve" your financial health in the long term in the hope that the stock price will rise.

Once you view the world through these three motives, your investment life becomes incredibly simple.
No matter how complex the problem, it can be reduced to a decision about how to balance the three motivations.
Finding the right balance between the three types of 'buckets' is much more important than filling each bucket.
---From "Chapter 3 [Loss Minimization] Is Principal Guarantee Safe?"

No matter where you are in your investing journey, everyone faces psychological challenges.
A sharp decline in assets is not a pleasant experience, and not many people are able to weather such a crisis.
On the other hand, when the stock market crashed in 2020 and 2022, a small number of people saw the market as "undervalued" and behaved completely rationally, emptying their pockets and buying more stocks.
However, there were an overwhelming number of people who sold all their stocks and got out completely, rather than investors with such strong mentality.
This trend turned a potential disaster into an actual disaster.
The majority sold their stocks, locking in losses and giving up any chance of future profits.

Of course, if you have 20+ years left to live and have the steely mental fortitude and guts to endure whatever the market throws at you (perhaps you were one of the few brave souls who jumped into a burning building in 2020), then it might be okay to forgo diversification.
If you're investing with a very long-term perspective, a "maintenance" bucket comprised entirely of stocks might not seem crazy.
If you let history be your guide, you will likely be rewarded for your courage in the end.

But for most people, completely abandoning diversification isn't realistic.
In this situation of growing fundamental uncertainty, we are left with two choices.
One is a bad choice, the other is a good choice.
Unfortunately, today's investors are often plagued by a flawed investment strategy known as "false diversification."
They believe they have made a rational choice to lower returns instead of increasing their confidence, but if things go wrong, they risk being hit just as hard as aggressive investors.
This is a likely outcome for any investor who adopts the traditional approach of balancing their stock market investments with only bonds.
---From "Chapter 6 [Diversified Investment] Investment Strategies That Guarantee Only Mediocrity"

Nothing worthwhile comes easy.
Fortunately, you don't have to complete the process to enjoy the benefits.
In fact, you will feel better from the moment you take your first step.
The reason is simple.
Money is the result.
Money is the result of all the values ​​you've added and the habits and decisions you've adopted.
This means that you cannot improve your financial situation without improving yourself overall.
The actions you take to increase your bank balance will have an impact on other areas of your life, improving your relationships, your mental state, and even your physical health.

This may sound like a grandiose claim, made by this book simply to clear up some misconceptions about money.
But I know this to be true because I have witnessed it happen to me and others.

Money is not something to be afraid of, anxious about, or feel guilty about.
Money is a tool that helps us live our best lives and helps the people we care about live theirs as well.
Because money impacts every aspect of our lives, making progress can enrich our lives far beyond our bank account balance.
And now that you've let go of your baseless beliefs and understood the reality before you, you can begin your journey right now.

---From "Chapter 8 [Conclusion] How to Overturn Common Sense and Achieve True Wealth"