7.5 Lies That Keep You from Being Rich by Beau Henderson

[amazon-product align=”right” alink=”0000FF” bordercolor=”000000″ height=”240″ region=”us” tracking_id=”varsblah-20″]0762434279[/amazon-product]Money is complicated. It’s no wonder there are so many misconceptions about building wealth. In 7.5 Lies That Keep You from Being Rich, Beau Henderson aims is to uncover the truth.

Lie #1 – Assets equal wealth

You can own a ton of assets but be broke if you don’t have healthy cashflow. This is where the focus should be. It might be tough to realise how shaky your foundation is but once you know exactly where you are with income, expenses, assets, and liabilities (get someone else to create and update these statements if you’re not up for it yourself), you can decide exactly where you want to go. Get your cashflow positive by spending less than you earn before investing the surplus.

Lie #2 – High risk equals high returns

“The problem with this line of thinking is that it’s built on the premise that in order to increase our chance of winning, we must increase our chance of losing,” Henderson explains. Instead of gambling in this way, we should exchange high risk for wise risk. Much like a bank going through an intense background check before giving out a loan, do the necessary research so you understand the investment. It’s not enough to go ahead because someone at work said it’s a good deal.

Lie #3 – A great investment is the key to becoming rich

The key is to become a great investor, not to find a great investment. Build a solid foundation so you’re protected in the event of lawsuits, disability, premature death, and erosion factors like taxes, inflation, and so on.

Lie #4 – Money is all good or all bad

Is money the solution to all the world’s problems or the root of all evil? The answer depends on who you talk to and how you use it, which means neither is inherently true. “Money is simply a measure of our ability to create value,” Henderson points out. It’s neutral; just dead presidents on paper.

Lie #5 – Making money means I am taking care of my family

There’s no denying that making money is important but you’ve got to draw the line when it comes at the expense of other things. Besides, what’s the point in building up wealth to create a great life for your family if you wind up rich and alone because you pushed them away? Don’t forget to invest your time and energy in what really matters. Ultimately, no amount of money can create or replace a connection that isn’t there.

Lie #6 – Banks are a safe place for my money

If the financial crises has taught us anything it’s that banks can go bust (and take your money with them when they do). But even if they don’t, putting all your money in a savings account isn’t the smartest move since it will be eroded by inflation. Be careful when taking advice from banks as they may sell you products that help them instead of you. It’s about business and they have to look out for themselves first.

Lie #7 – Life is a b***h and then you die

Sometimes it can seem as though the struggles we go through never stop. And yet these struggles are there to help us. Life is like a school and the difficulties we experience contain the exact lessons we need to learn in order to progress. We’ll continue to repeat the same mistakes (and they’ll be more painful each time) until we learn to choose love over fear.

Lie #7.5 – I should trust my financial advisor

The reason this is only a half lie is because Henderson is a financial advisor himself. The message here is not to trust anyone blindly. Find an advisor who will be more focused on building something together with you instead of just selling you products to earn some fees: “Rather than telling you what you should do, that individual will equip you with the steps to work toward your definition of a rich life,” Henderson writes. “Not their definition; not what is working for the other guy; but your definition of a rich life.” That’s where the real gold lies.


This short and simple book contains some interesting (although not revolutionary) ideas. Most of them are similar to the ones promoted by Rich Dad (cashflow versus assets, lack of education is the greatest risk, build a team that has your interests at heart, raise your financial IQ, etc). Firstly, being rich isn’t just about money. As Henderson writes: “The definition of a rich life is doing what you want to do, when you want to do it, with who you want to do it with, without having to worry about money.”

Secondly, money isn’t everything. Sometimes it might make sense to cut back on the hours you work in order to free up extra time to spend with your loved ones or to pursue your passions. What you lose in money is more than made up for in the value you gain through the other pursuits: “You can accomplish great things, but if you don’t have peace, or fulfilment, or you lose the things you were pursuing in the first place, then what’s the point? You definitely will not be rich.”

The main criticism of this book is the fact that it’s presented as a list. Many of the points spill over into each other while others contain superfluous information that doesn’t quite fit. The book would have worked far better (and probably wound up shorter) as a single essay instead of being somewhat gimmicky by including the temping ‘half lie’. (I’m sure you read the title and were quite curious as to what it was!)

I know list posts are the way to go in these days of short attention spans (I’ve been guilty of using them on a number of occasions) but sometimes people are prepared to take the time to dig deeper into a topic. Make it easy to skim and readers will do just that.

If you enjoyed this post, please remember to Like, Tweet, and Share it using the links at the top or bottom of the page. And remember to subscribe to free alerts or follow me on Twitter to be notified when the next review is released. For more on the subject, see my review of Everything You Ever Really Needed to Know About Personal Finance.