The Premise
Rob brings an interesting view of personal finance. He generally strays away from the grain with outside of the box thinking. Following up from The Price of Money, Rob has gone to the next step of improving ones financial situation over the decades to come.
Like many personal finance books, this one is very self-aware of what the average individual should be doing and transfers that information to the reader in a clear succinct prose.
With simple explanations of events that have led to the default advice and the spanner in the works that was covid and the ensuing inflation spike. Rob puts forward arguments to how the landscape has changed and how that affects the average outcome in the modern age.
Does the book provide good advice?
Having already explained concepts of money, assets and inflation in The Price of Money, Rob has focused on more actionable solutions in Seven Myths About Money.
There is a presumption that the reader already understands asset classes and the uses of index funds and provides an alternative way of thinking about how to improve one's situation.
First he covers the basics of structuring one's savings as a base to ground decisions. Following this up with the idea of having three buckets. The first being the protection bucket which includes cash and property.
The second being the maintain bucket, which contains investments. This bucket is the section of your finances that covers savings and index funds that are designed to project your wealth into the future.
The third being the improve bucket which includes assets or concepts that will allow one to improve your current situation and usually use the concept of taking risk in order to generate a better than average outcome.
One important concept that is discussed within the first few chapters is the idea of breaking the wage per hour worked barrier that many people are stuck in. The modern age has allowed all of us to generate income in a way that does not require us to be paid per hour worked. Instead we should utilise our talents to generate income in alternate ways to make money without having to actively work.
Rob also proposes that focusing on earnings will be much more lucrative in the long term than investment in the stock market. This is mostly due to the fact that you have more control over the outcome. Which is extremely sound advice as there's only so much you can cut back before your issue is your lack of earnings.
His biggest contradiction is that, one needs to take more risk with their investments to improve ones situation.
However I would say that this overlooks the fact that most people have not reached any limit to their ability to invest in an index funds.
Most people still do not have a stocks and shares ISA never mind the £20,000 limit and in my opinion upping their savings rate would be enough for most people to be better off in the future without needing to take more risk.
Top Takeaways
Most people should focus on earning more once they have adequate savings.
Being passive will not net you the same benefits afforded to previous generations.
Breaking the earnings per hour barrier will bear the greatest fruit.
Investment returns may be much lower in the future so best not to rely on stock market index funds.
Improving ones situation is in your hands and is best not to rely on the actions of others.
Conclusion
All in all, Rob's books are a great read. Even if you don't agree with everything, there are still challenges to the status quo that will get most people who aren't already entrenched in finance content thinking.
Most of the concepts for those into personal finance are not new here. However it is always good to read them again to reinforce them. It does make some good cases for the changing world ahead of us and how age old advice is no longer relevant.
I do feel the book is aimed at people who feel they are at a dead end having set up their regular investments and are unsure of what more to do.
I look forward to whatever Rob comes up with next as the books are short and straight to the point. If you wish to purchase the book for yourself please click the link below.
Seven Myths About Money: And the Truth About Finding Financial Freedom - Amazon
The Price of Money: How to Prosper in a Financial World That's Rigged Against You - Amazon
