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What is the essence of finance?

As we all know, the financial industry is a "rich" industry, but whenever someone is in the financial circle, we will feel that he has his own "halo".

bank interest

A rich man borrowed 5 yuan from a bank on Wall Street for two weeks. Bank loans must be guaranteed. He used the Rolls Royce parked at the door as collateral. The bank clerk parked his Rolls-Royce in the underground garage and then lent the rich man 5 yuan. Two weeks later, the rich man came to pay back the money with interest on 15 yuan. The bank clerk found that the rich man had tens of millions of dollars in his account, so he asked him why he needed to borrow money.

Regal said: Wall Street will never find a parking lot in 15 yuan for two weeks.

unprofitable investment

please give an example of unprofitable investment. The economics professor asked questions.

"Take my sister out to play." A male classmate replied.

Principle and individual totals

Pick 75 yuan once, or pick 5 first and then 25, which do you choose?

lose 75 yuan once, or lose 5 first and then lose 25. Which one do you choose?

Experiments show that the vast majority of candidates pick up 75 yuan and throw it into 75 yuan together.

this is the principle of pleasure and pain in economics: n pieces of good news should be released separately; N bad news are released together; A big bad news and a small good news are announced separately; A big good news and a small bad news are announced together.

resource matching

If men and women are divided into four excellent grades of ABCD, then the current situation is that A men want to find B women, B men want to find C women, and C men want to find D women, so only D men are left.

women, on the other hand, are all looking for a man in ABCD. Finally, there are a woman and a man.

Comparative utility

There is a formula in economics: happiness = utility expectation.

For example, your boyfriend's boss gave him 1 yuan as a reward for his excellent work. At this time, if your expectation is that he can buy himself a bag of 1 yuan, then dividing 1 by 1 will give you only .1 happiness. But if your expectation is to let your boyfriend treat yourself to a western meal in 2 yuan, then divide 1 by 2, and your happiness is 5.

finance is cruel.

If you want to find an antonym of "literary youth", the most appropriate one is "financial youth".

Financial youth

How to understand this sentence?

starting from tomorrow, I want to have a house facing the sea and blooming in spring. From tomorrow on, be a happy person, feed the horses to chop firewood and travel around the world. From tomorrow on, I only care about my relatives, lovers and friends.

The premise of all this is: having a house, having a house, having a house.

As for the house, if you can look at it with "financial thinking", then you will not be so obsessed with what Gao said, "Don't buy a house, buy a dream".

After the housing reform in China, the house has actually become a financial product. Many people think that housing prices in China are sky-high, because houses are just houses in their eyes. And if you regard the house as a financial product, you will understand why the house price in China is soaring.

what is financial operation? It is to promote the capital to flow into the most efficient countries and regions, the most efficient industries, the most efficient enterprises, the most efficient projects and the most efficient individuals in order to realize the value-added and expansion of capital.

toolbox awareness

So from now on, you must have toolbox awareness.

that is, your house, car, stock, salary and so on. It's all your financial instruments. Your purpose is not to own them completely, but to use them. You should add value through lease renewal, turnover and redemption, and then push yourself higher so that you can allocate more resources.

the essence of finance is how money makes money. Money is not the root of all evil, but it can quantify everything. Assets can be quantified, thinking can be quantified, life can be quantified, feelings can be quantified, and even time can be quantified.

everything is for my use, and everything is not for my use. All tangible assets are external things, and the ideas and patterns you form in this process are your own.

in order to allocate larger, more and farther resources, you also need to understand the principle of leverage.

Lever principle

Give me a fulcrum and I can pry up the whole earth! This is a famous saying handed down by the ancient Greek scientist Archimedes, which means that no matter how heavy an object is, as long as my lever is long enough, I can move it. The lever principle is a very clever invention, and we can't pry anything outside our "force" at all.

This is also a very inspirational sentence, which inspires us to change the world boldly. But it is all kinds of financial players who really apply this sentence to the extreme and completely change the world.

no leverage, no finance. The essence of all financial innovations is smooth amplification leverage. The first lever is 1: 3, the second lever is 1: 3, and the whole system is 1: 9. There are three, four or even invisible levers.

it's not difficult to amplify the lever, but it's difficult to match the lever series with your control, otherwise it will get out of control. Repeated illegal fund-raising, small loans, guarantees and other bankruptcies due to the break of the capital chain, as well as the repeated loss of Internet finance, are all caused by leverage. Therefore, the essence of all financial crises is that leverage is out of control!

For the country, Shui Mu Ran thinks that the real wisdom is to design a lever with controllable risks, and leverage and allocate distant resources with credit as the fulcrum. That is the wisdom of the country and the essence of financial thinking.

Four roles

The essence of finance is Qian Shengqian, and this logic turns the world into four roles:

The first role: I have money, and I need to turn it into more money. (Capitalist)

The second role: I have no money. I can help rich people turn money into more money. (Banks and other institutions)

The third role: I don't have money, but my ideas can be turned into money (entrepreneurs)

The fourth role: whoever gives me money, I will help him make money (migrant workers)

Therefore, finance is an angel, because it can help people who need money to get money; Finance is also the devil, because it can make the rich richer.

So, finance is to put it bluntly: managing money for the rich and financing for the poor. Then take value-added as the goal, leverage as the means, credit as the cornerstone and boundary as the risk. The essence of finance is appreciation, credit, leverage, risk and the interaction of these four words, thus forming a large operating system.

Credit is particularly important here, because credit is the basis of leverage. You have credit, and I leverage. There is no credit and no finance. Credit is the foundation and lifeline of finance!

so in the future, your credit is more important than your identity!

serving the entity

finance can be unconstrained, but it can't be illusory.

the so-called image in the sky is shaped in the ground. The essence of finance is just the image projected by the physical industry in the sky, and finance must step on the rhythm of the entity.

For example, for an enterprise, your profitability must be greater than your debt speed; For the financing platform, your return on investment must be greater than the interest promised to customers. For the bank, the corporate risk of your lending must be within your own tolerance.

once finance breaks away from the physical rhythm, it will enter the bubble stage. And now, we are facing this problem!

Deng said: Finance is the core of modern economy. If the finance is done well, everything will be alive.

boring

If there is wisdom in finance, Shui Muran summed up five sentences:

The root of human inequality is private ownership, and the root of the excessive gap between the rich and the poor is finance.

when you have to work hard to succeed, you have lost at the starting line.

compared with the weakness of poverty, ugliness is nothing.

Some things can be changed without hard work. No matter how beautifully designed the RMB of 5 yuan is, it is not as attractive as the RMB of 1 yuan.

so, finance is really boring sometimes.

the game of human nature

whether in stock trading, investment or buying a house, finance is a game with human nature. This game is divided into four realms:

technology-art-magic-Taoism.

vertical and horizontal cooperation, reeling and cocoon stripping, and setting up a point control bureau; Insight into the warmth and coldness of human nature and analysis of public behavior, along the way, if you can do it with ease, you will reach the realm of "Taoism." At this time, everything is born with each other, born with illness and death, and everything comes and goes freely in your heart.

your strongest opponent is yourself. Once you beat yourself, it's like jumping out of the three realms and not in the five elements. Don't be humiliated, watch the flowers bloom before the court; I have no intention of staying or staying, and I look up at the clouds in the sky.

you at this time: people abandon me and take it, and people take me and give it. The great self has no self, and what all beings want is exactly what you give up.

So you became a kind Buddha. Related Q&A: Related Q&A: A popular explanation of the principle of financial leverage?

financial leverage means that when investors invest, they leverage to enlarge their own funds by several times, or even dozens of times, and buy more investment objects with less funds, resulting in their gains and losses will increase according to this ratio.

For example, when an investor trades in gold, the margin is 1%, and the leverage is 1 times. Before adding leverage, it takes 3, to buy the first-hand gold, but after adding leverage, it only takes 3, to buy the first-hand gold. At the same time, for every change in gold, the investor's gain or loss is 1 times.

It should be noted that when investors leverage, the higher the leverage, the higher the risk, and the lower the leverage, the lower the risk; When the investor's margin is insufficient, the investor will be forced to close the position without additional margin operation. Therefore, when investors leverage, they should strictly control their positions according to their own assets to avoid being forced to close positions.

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