On the first day of the Lunar New Year this year, I have been thinking for a long time what to write for my readers on the first day of the Year of the Rabbit.
Let’s not talk about the stock market, let’s talk about wealth planning! I think this is the most worth talking about on the first day of the new year.
1. What is wealth?
When it comes to wealth, the first thing you may think of is money!
In fact, there is a huge difference between wealth and money.
Money is just currency, and wealth is something that can continuously change into money.
This is a fundamental problem, and if you can’t tell the difference between them, there will be three endings:
First, you will never earn much money in your life;
Second, even if you make money, you will work hard all your life, and you can’t stop at all. I made a lot of money, it’s just a number, maybe it’s all handed over to the hospital;
Third, you can’t do what you like to do in your life, and you can’t refuse to do what you don’t like to do.
2. What is financial freedom?
Financial freedom is only measured in terms of money.
I personally think that primary financial freedom is achieved when your annual passive income is equal to your active income.
When your passive income is 2x your active income, then you are largely anxiety-free and can do something you love.
The more passive income you have, the more free you are financially, so that you do not think about making money first, but whether it is fun or meaningful. Then in the process of doing it, make some money by the way.
Once you reach this level, you will be very focused and devoted in doing things, and pay more attention to long-term interests. The probability of success is higher than that of people who only think about making money.
So you can look at the ratio of your passive income to active income.
The sooner you let passive income over active income, the sooner you will achieve freedom.
How to increase passive income? We still have to go back to our understanding of wealth.
3. There are three types of wealth
The first type of wealth is assets.
For example, stocks, bonds, real estate, funds, company equity, intellectual property, precious metals, commodities, collectibles, etc.
And money itself is not an asset because instead of growing, it keeps depreciating.
So now we should reflect on how much assets we hold? If most of your money is in the bank, then it is impossible for you to be financially free!
What you need is to find a way to turn cash into these assets. But it must be noted that buying and holding assets is a high-threshold matter. It requires us to have certain professional knowledge and to overcome our human nature.
Otherwise investing is a disaster for you.
This world is cruel! Holding cash will definitely lose money, and if you don’t have the ability to invest money indiscriminately, it will make you lose faster.
When you master the password of investment, it is very simple to make money through assets. It is relatively easy to obtain at least an annualized return of 10%.
So at this time, you just need to see how much your principal is.
If it is 1 million, it is 100,000 a year, and your annual income is exactly 100,000, then you should be less anxious.
As long as you are still working, you don’t need to use this asset. After 7 years, it will become 2 million.
At that time, the annual income will be 200,000. I believe that most people’s income cannot rise so fast, especially after middle age.
So what we need to do is to accumulate the principal as soon as possible, and find a way to turn the principal into an asset (wealth) so that it will continue to grow.
Please remember: the rich love assets, and the poor love cash! Because what the poor like is not money itself, but consumption.
The second type of wealth is health
Many people don’t take their health seriously.
We can think about it, a 40-year-old programmer and a 25-year-old programmer. Who is more popular?
As the human body ages, many jobs will continue to depreciate. This type of work is not a friend of time. It is necessary to quickly accumulate principal when you are young, otherwise it will be dangerous in the future.
What does it mean to be young? It means healthier, more energetic, more capable of learning, and more able to work overtime.
When you have health, you have the ability to continuously create wealth. On the contrary, you may overdraw your years of savings to the hospital.
I am 36 years old myself. On my birthday, I posted a comparison photo of my 18-year-old and 36-year-old in Moments. I am very relieved that I still have the greatest wealth of health.
A person can be very mature intellectually, but his body and mind must be young, energetic, positive, optimistic, energetic, and have the courage to constantly challenge the future.
Otherwise, wealth is out of the question!
The third kind of wealth is thinking
Most people in society make money by selling their labor and time. So they can’t stop at all , once they stop, there will be no income.
Because of this, they have no time to think about wealth at all, so they can only be busy all the time. And the enterprise will not let them stop and think, the enterprise will whip them to keep busy. The most typical ones are takeaway and delivery guys.
We all have too little time to think.
Many investors always lose money in the stock market! Why? Isn’t it because the stock market is just like a company, pulling them in and out quickly every day.
Look at Buffett, he can spend a year thinking about an investment decision, and then take a day to make a move. In the end, it will determine the income for several years in the future.
Thinking can be realized continuously! For example, I myself share what I have learned and my thoughts on the Internet.
At the beginning, I didn’t think about making money at all, but I really could make some money by the way. When you provide something valuable, users are willing to pay! People will think that spending 10 yuan actually made them earn 10,000 yuan more, or avoid a loss of 10,000 yuan, so it is worth it.
The internet is a great thing and we should all use it. He can turn our thinking into an asset! Assets can continuously generate cash flow!
Even if you don’t make money for the time being, it’s a good growth for yourself. I’ve always believed that if you can’t write down what you’ve learned, you probably didn’t understand it.
I said and wrote less than 1 million words a year, so no matter what, I must have gained a lot. These words, these thoughts will sooner or later become assets!
What people in society lack most now is the ability to think independently, no wonder they can’t get rich.
The most important thing we should think about now is how to productize ourselves?
Please think carefully about this issue! If you productize yourself, and then use the Internet and media, you can smoothly turn yourself into an asset.
In today’s society, the importance of relationship has been weakened more and more, and the more developed the place, the less relationship is considered. If you are from a rural area, you should try to go to a big city and productize yourself there.
In small places, relationships can drag you down.
These are the wealth that thinking brings us, instead of blindly comforting ourselves with busyness.
In conclusion, I think assets, health and thinking are our wealth, and we must always do things to grow our wealth
4. Always do things that increase wealth
How to make wealth grow?
First, do things that cause short-term pain but long-term happiness
Buying bottoms is painful, right? But the future will make a lot of money!
Happy chasing the bull market, right? But in the future you will suffer from doubting your life
The same is true in life, it depends on whether you are willing to give up things that seem very happy in the short term.
Learning is painful, right? But what about trying to lie down every day?
Exercising painful? But how do you compare the photos you have now with when you were 18 years old?
Second, lifelong learning
Learning itself is not painful, what is painful is learning something that we are not interested in or don’t like.
Everyone should look carefully for something that fills them with enthusiasm. It is the kind of thing that you are willing to do every day without giving money.
It is a joy to learn something related to these things. As long as you learn it well, it is possible to turn them into assets.
The biggest fear is not knowing what you are passionate about. It’s almost like The Walking Dead. Such people are no longer “young”.
Third, pay attention to the accumulation of repeated interest
Unless you are lucky, few things are instant success!
We can see in the stock market that many people make a lot of money at the beginning, but in the end they lose a lot of money!
why? Because they are stupid and can’t tell whether they make money because of luck or strength.
In the past three years of the epidemic, how many people have returned to poverty overnight?
But let me tell you a brutal truth. Those companies that remain rational during the boom period and retain sufficient cash flow will achieve phoenix nirvana after three years.
In the epidemic, all the damned are dead. These companies just use the cash flow in their hands to make large acquisitions and sweep goods, or to seize the market.
Then you will find that these companies have a stronger ability to make money.
What is luck, what is strength?
It is strength that can survive countless economic cycles and make money from crises. Such as Buffett and Li Ka-shing.
Anyone who wins by strength knows that luck is something that can be met but not sought, just be yourself. They don’t complain and don’t hate the rich.
The more people who hate the rich, the less they can get rich.
The ancients said: If you don’t accumulate small steps, you can’t reach thousands of miles, and if you don’t accumulate small streams, you can’t form rivers and seas!
The compound interest effect is very slow at the beginning. Once the underlying assets accumulate to a certain amount, the power of a nuclear explosion will instantly become.
For example, I have persisted in reading books for more than ten years, and I didn’t feel any change at all at first.
But now casually chatting with peers, the cognitive gap is immediately drawn out.
I have been exercising for 18 years, and I didn’t feel any changes at first.
Now standing with my classmates, I am afraid that they will reveal my age.
4. New Year’s Eve! Let’s make a wealth plan together
No matter what age you are now, I think you can take some time to think about your future wealth plan during the festive day of the Spring Festival.
Please don’t think of wealth too narrowly.
Everything that can increase your “principal” is worth doing! Wealth is something that can be turned into money continuously, not deposits in the bank. Of course, it may not necessarily be a house, because you have to consider its future long-term annualized rate of return.
Think about what is our respective wealth? This question is quite personal.
May the Year of the Rabbit be a year of wealth for everyone! ! !
The reward is voluntary, and every penny is a silent support, haha!
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