Smart investment makes us rich, wealthy and free, and enables us to have a new pattern of life. It is everyone's wish to achieve financial freedom, but what can we do to achieve financial freedom?
Let's share a short story. Once upon a time, there was a young farmer whose daily wish was to pick up a goose egg from the cage for breakfast. One day the farmer found a golden egg in the cage. At first, he didn't believe it was true, so he took the golden egg to the goldsmith. The goldsmith told him that the egg was made of pure gold. So the farmer sold the golden egg. Then a grand celebration was held.
The next day, the farmer came to the goose cage early in the morning to see, only to find another golden egg lying there. This situation lasted for several days. The farmer could have lived a good life with the goose. But the farmer is a greedy man. He was very dissatisfied with his goose. Because there was no way to explain it to him. How did you lay golden eggs? Otherwise, maybe he can make golden eggs himself. The farmer thought angrily of the lazy goose. You should lay at least two golden eggs every day. The current speed is too slow. The farmer became more and more angry. Finally, the angry farmer. Split the goose in half. From then on, the farmer could not get any golden eggs.
This story is very simple. I believe many friends have heard of it. But do we really understand the truth. In fact, if you think about it carefully, the truth of our investment and financing is the same as that of this story. This golden egg is our cash. The goose that can lay golden eggs is our asset. As for the cash in our hands, he will not become more by himself. Let's say we have a piece of cash. Put it on your hand. In another hundred years, there will still be so much cash.
Now I will not become more. We must use the cash on hand to buy assets. Assets are like geese that can lay golden eggs. Only assets can help us continuously lay golden eggs and generate cash flow. As long as you have enough geese. Even if we are not working. It can also obtain cash flow continuously. This is a good way to achieve financial freedom.
Everyone has a dream of financial freedom. And to realize this dream. We should first learn to distinguish between consumption and assets.
Only through long-term accumulation of assets. We can achieve financial freedom. If you are like most people, you don't have much money. So the first thing we should do is actually to save money to accumulate the principal.
There is a very popular financial book called Rich Dad, Poor Dad. This book is a very good financial enlightenment book. This book introduces a very important financial point of view. It means spending less and saving more. And invest the saved money in the assets that can bring income. In this way, financial freedom can be perfectly realized.
But what is consumption and what is asset?
Here is a simple example. The unit gave us a bonus of 1000 yuan. We bought cigarettes with 1000 yuan, which is consumption.
If you take the 1000 yuan to buy Yu'e Bao. This is the asset bought.
If you bought cigarettes. There is nothing left after smoking. But if you buy Yu'e Bao, it can help you increase the value of your money. Let money make money. What can make money for us is assets. For example, stocks, funds, real estate, financial management, etc. Although they had different speeds during their lifetime. But we only need to hold these assets that can survive. Will continue to bring us cash in various ways.
What can't generate money is not an asset. For example, we spend money to buy cigarettes. This is consumption. After smoking, the money will not exist.
Cash itself is not an asset. Some friends may see it here. Surprised, isn't this cash an asset? Then we worked hard to save hundreds of thousands. Isn't that becoming rich? Unfortunately, at least from the perspective of making money. Cash is not an asset.
Because holding cash will depreciate in the long run. If you have hundreds of thousands of RMB in your hand. This is indeed a fortune at present. But this wealth should be quoted. In the 1980s, there was a word called 10000 yuan household. In the 1980s, it was a very enviable adjective.
In the 1980s, many people were paid only a few dozen yuan a month. A meal is just a few yuan. So who has tens of thousands of yuan at home? It's definitely a very comfortable life. But now. 10000 yuan is a little more than the average income of two months. It's nothing at all.
In the 1980s, there was a 10000 yuan household. Hide 10000 yuan in cash at home. So the original 10000 yuan is still 10000 yuan.
As for cash, he will not increase. But if the 10000 yuan household takes the original 10000 yuan. Buy such financial products as imaging index funds. So far. The 10000 yuan with high probability will become 300000 yuan. Such assets as stocks, funds, etc. They will make money by themselves. As for cash, he will not increase it by himself. So we should remember this. Now there are hundreds of thousands of people, just like the 10000 yuan households in the 1980s. Although it seems to be quite rich at present. But for another 30 years. Our current cash of hundreds of thousands may not be worth mentioning.
Why is this? Because there is more and more cash in the whole society. So if we hold cash that will not generate money by itself. Then the proportion of this part of cash in the total social cash will be lower and lower. It becomes less and less valuable. So having cash in hand is a good thing. But holding cash for a long time is a disaster.
Cash is dead, and it will not increase in value. So we need to use cash to buy assets. For example, stocks, funds, etc. Use these assets. He can earn money by himself, so that he can avoid the tragedy of devaluation.
We should remember one sentence. Cash is not an asset. Long term unused cash should be used to buy real assets. When we accumulate enough assets to make money, we realize financial freedom. What is financial freedom? Generally speaking, financial freedom means that we can not use it. Worry about money. At the same time, there is enough time to do what you want to do.
Some people seem to be very rich. They earn a lot of salary every month. But he has to work long hours without interruption. In order to maintain their wages. For example, an experienced dentist. Ah, he may love his work very much. His work can also bring him a lot of returns. But if he is unable to work, for example, retired. His high income came to an abrupt end.
Real financial freedom is the possession of a large number of assets that can generate money. In this way, even if they no longer put their energy to work. You can also get a steady stream of cash income.
We can have a look at, like these Forbes rankings, the world-famous rich. Basically, they hold a lot of assets. Bill Gates, for example, has a stake in Microsoft. Buffett has many stocks of excellent companies. Li Ka shing, for example, has a lot of real estate, ports and so on in the world. These rich people have a lot of assets that can generate money. Some of these assets are companies founded by wealthy entrepreneurs.
A real rich man has a lot of assets in his hands. At the same time, they will never pay for the consumption they cannot afford. For example, Bill Gates, the former richest man in the world, has a wealth of tens of billions of dollars. The vast majority of his wealth is his stake in Microsoft. These shares are his assets. As long as Microsoft is profitable. These shares can continuously bring him cash.
So is Warren Buffett. The vast majority of his assets are the shares of Berkshire Hathaway, which he controls. But Buffett is famous for his frugality. He has worked in the office building in his hometown for decades. Although he holds tens of billions of dollars, he never covets vanity. Reducing consumption does not mean that we should be stingy people like Grundfos. It means more rational consumption. Don't bear the expense that you can't afford.
For example, when our monthly salary is 5000 yuan, we don't want to buy the latest iPhone first. When we buy the first car, we can choose a more cost-effective model. When our time is not worth it. We can use more spare time to read books, study and exercise. Then borrow some expensive consumption that is not good for your health.
one can't make bricks without straw. We do investment and financing. First of all, you have to be rich. We are more pragmatic in consumption. This will save more money for investment. We will be able to embark on the road of money making faster. In this way, our investment will become easier and easier. Will achieve financial freedom faster. If we want to become rich, we should put our money into it. Buy assets. Assets can generate money. When we accumulate a lot of assets that can generate money. We become rich. Even if we don't need to work in the future, these assets can also provide us with cash income continuously to achieve financial freedom.
But a journey of a thousand miles is under water. To accumulate a large number of assets, there is a very important premise. That is, we should have the principal. With the principal, we can buy assets. So how to get the first bucket of gold? It is the first step we should do. Everyone's first bucket of gold may come from different sources.
Some obtained the first bucket of gold from their parents. Some people won because they bought lottery tickets. Some people make money by doing business. But for most of us, it is through work. To earn wages. This is our first bucket of gold.
This first bucket of gold is at our disposal. We can decide its use at will. So many friends spend this money on eating, drinking and having fun. Eat delicious food and have fun. In this way, you can enjoy life and get happiness. This is not bad. But if you spend all your money on it. As a result, we have no money to accumulate assets. That would be worse. For example. We can eat out at noon every day. The take away Dragon Boat meal cost 20 yuan. There are 12 months in a year. There are 22 working days every month. In a year, the money spent on lunch delivery alone is nearly 5300 yuan. But we can also prepare lunch for ourselves at home. On average, it can be done well for less than 10 yuan. It's better to prepare this lunch for yourself than to order takeout. Not only more healthy and delicious. And it can save thousands of yuan every year. Why not?
If you insist on doing so, it's just lunch on weekdays. In ten years, we can save nearly 30000 yuan. If this money is used to buy assets every year. Let money make money. Ten years later, the 30000 yuan will increase to 100000 yuan. For most of us ordinary people. Wealth gap. It is in this bit by bit. Many successful entrepreneurs are famous for their economy. Because every penny saved. All are future profits.
Just like the famous Jewish ship merchant. Stuart. Once there was a famous saying. He said, "Every 0.01 yuan saved in business will increase my profit by 1 point." Saving is in direct proportion to profit. His employees commented that Stuart was one of them. A very stingy and annoying person. He attaches great importance to controlling costs and expenses.
If we spend an extra penny on unnecessary expenses. This means that we have less money to invest. When we spend this money on food, drink and play, we will have no more. But in terms of investment, he can make money continuously. A penny can even produce countless pennies in the future. Investment should be made as early as possible. The earlier we start accumulating funds for investment, the earlier we can accumulate assets. Let assets work for us, and keep making money. We can achieve the goal of financial freedom earlier.
