The new rules for building wealth in 2025 - finance expert Rob Dix
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You can't rely on what was true in the past to build wealth in the future, so says Rob Dix, our guest to kick off the new year. Rob is a finance expert, host of The Property Podcast and has a new book out this week, Seven Myths About Money.
Btw, if you want to learn how to build wealth in the UK, you can get our free step-by-step guide here.
Regardless of how you feel (or the impression you might get from the news), things have basically never been better for humans… except for when it comes to money.
You used to be able to raise a family on one salary, and not think about your pension because it was linked to your job and final earnings. That's not the case now.
Basically, things have got worse for the average person in the UK. And if you aspire to do better than the average, you can't just follow the old path of our parents and grandparents. (Are we actually worse off than our parents? Have a listen to our episode on just that awkward question.)
A lot of financial advice dates back to the 1920s and is out of date, so you have to do things differently.
Rob thinks the big shift has been in interest rates. Ever since the gold standard was totally abandoned in 1971, interest rates have been falling, because whenever there's some kind of crisis, the knee-jerk response of governments is to reduce rates and print money, to get the economy going again.
That's how we ended up with incredibly low interest rates after the crash of 2008. And it meant people with assets could borrow to buy more, and they ended up doing really well.
But then we hit 2022, and interest rates basically started going back towards their long-term average. So we're at the start of a new era, and Rob doesn't think anyone's fully appreciated what a big shift that is yet.
Where we're at now with interest rates isn't actually abnormal, it's closer to the historic average.
At some point, there will be another big catastrophe, and interest rates may go back down – but Rob doesn’t think they will go back down to near zero. That long-term decline has ended.
And anyway, you can't do anything about that. You've just got to control what you can control – and you can control more than you think.
Myth 1: You should try and de-risk or mitigate risk.
There's no correct way to invest, and it's not always bad to seek more risk. Like most things in finance, it depends.
If you don’t want to just maintain your wealth, but rather improve your lifestyle as well, then you need to find a way to do that in a safe and smart way - whilst taking on more risk - rather than heading to the casino.
Risk factors will be different for everyone (like age, appetite, or earning potential).
Diversified index funds have historically grown over time – they won't make you rich quickly but they should eventually let you retire. For most people they're a very worthwhile thing to do but it takes decades.
So, if you want to change your life in the short term, index funds probably won't get you there.
Myth 2: You should own your home.
You have to own assets, but you don't have to live in your assets.
There are benefits, obviously, to owning because you can get leverage (borrow money) on a property and it's generally a good long-term investment. Plus renting can be grim.
But flexibility has value too – what if you want to move for a job or a partner?
Property value doesn't necessarily increase faster than any other investment.
Ultimately, Rob thinks owning a home should come down to feelings rather than finances.
This is different to retirement btw, the general guidance is that you want to own a paid-off home by the time you retire otherwise you can spend a fortune on rent. You might be ok with that because you have lots of other assets but just be aware that renting can be a huge cost in retirement so factor that into your long-term plans.
Myth 3: Everyone should budget.
If money is ultra tight, you should be budgeting, especially if it makes you feel more in control.
It can help you be more mindful about what you spend.
But not everyone finds it beneficial – it locks some people into a sense of scarcity.
Most people only have so much time and energy to focus on money stuff, so if budgeting is taking up all your headspace then that's probably a waste of energy, which you could be using to figure out how to earn more and end up on top down the line.
Myth 4: Retirement at pension age is a desirable goal.
Lots of stuff around early retirement is really helpful, and you don't want to be in a position where you have to work forever.
But if you're the kind of person who's able to retire early, you almost by definition won't actually enjoy being retired early.
The "retirement" age of 65 is based on people who lived decades ago when life expectancy was shorter. The average life expectancy in the UK is now between 80 and 90.
You probably can't save enough in 30 years of working to sustain you for 30 years not working.
But if you can find something you enjoy doing and feel useful doing, and you can pass on the knowledge and experience you've accrued, without it taking up all your time, you're probably going to be happier for longer.
For more on how much you might need and how to build that pension pot, check out our episode with Lisa Conway-Hughes, "How to retire well".
Rob's quick-fire guide to personal finance:
Make easy cuts to your spending – ditch the subscriptions you don't use and focus on mindfully spending on what makes you happy.
Get protections in place, like life insurance, if you have a family. If that's a bit daunting, have a listen to our "Do you actually need life insurance?" episode.
Make a decision on your home. How much do you want to own a property? How soon do you want it, and would you prioritise it over everything?
Work on earning more. That doesn't necessarily mean starting your own business, or working all hours. It can be getting a qualification, or switching industries, or working smarter. There's no risk, and it'll have a higher impact than any investment. We've got a great step-by-step guide on how to get a pay rise.
