If you don’t have a money printing press yet, you have to become a money printing machine yourself, that is, you have to continue to sell your time in order to survive.
Many people fall into financial difficulties for the following three main reasons: 1. They think that if they can make more money, everything will automatically get better. In fact, as income increases, people's living standards will also improve in parallel. . Some NBA stars initially wanted to be frugal and drive their own mid-range cars to practice, but they soon realized that if they didn't buy a luxury sports car, they might be marginalized.
2. Confusing needs and wants. Most of the things we buy are not actually needed.
3. Confusing liabilities and investments, such as cars and houses. If they are purchased with a loan, it is a liability. Of course, in an era when housing prices are soaring, if income growth cannot keep up with housing price growth, then it is still correct to buy a house as early as possible, but now that housing prices are stabilizing, it is indeed necessary to carefully consider whether to become a house slave.
To save money, you must force savings, such as the following method:
1. Set up regular transfers and deposit at least 10% of your income into savings on payday On the account, set up a happy account, and transfer 5 to 10% of your income regularly every month to satisfy some of your larger wishes, such as buying a good car. If you don’t have enough money in the happy account, just wait. Don’t overdraft in advance. Consumption.
2. After each salary increase, deposit 50% of the increased salary into a savings account, 25% into a happy account, and the last 25% for daily living expenses, so as to ensure a standard of living. Unnecessarily growing in step with income. People's desires are endless. Many NBA basketball stars have made tens or even hundreds of millions of dollars in their careers, but they squandered them all within a few years because of completely uncontrolled desires.
After saving money, you can consider how to increase the value of the money. We need to answer the following 7 questions correctly:
1. What risk level should I choose? All financial products can be divided into 6 risk levels, ranging from level 1 (such as bank savings under 50 trillion yuan) with no risk at all to level 6 full of risk (many investment institutions have ratings from R1 to R5). Corresponding to levels 2 to 6 here).
Bodo Schaefer, the author of "The Road to Financial Freedom II", suggested: A mechanism is needed that can achieve an average rate of return of 12% or more, regardless of whether the market is going through or falling at the moment. Of course, this is difficult to achieve today when interest rates are falling. We can set this number to 5-6%.
2. How should I allocate my money?
1) It is recommended to invest 40~50% of your money in currency products, namely savings passbooks, currency funds, pension funds, time deposits, bonds and other similar products.
2) Invest the other 40 to 50% in large international stock funds, as well as products that can earn roughly the same profit but with high safety, such as British life insurance. (Of course, the current yield on these insurances has dropped to 5~7%).
3) The remaining 10~20% can be used in higher-risk areas.
3. Which currency products are the best?
There is no universal answer to this question. The best products and suppliers are constantly changing. It is recommended to check on some reputable investment media (such as 7 Minute Financial Management).
4. Which stocks and stock funds should I buy?
No one can correctly predict the rise and fall of the stock machine market in the long term, so the best way is to buy the entire market. There are specifically the following 4+1 possibilities:
1 )Buy stock futures
2) Buy some large international stock funds. This requires you to read at least one book about funds first.
3) Find yourself a reliable consultant.
4) You can invest in capital funds, that is, funds with other investment companies as investment targets.
5) Buy funds.
5. When should you buy investments?
The best place to start is now, as soon as possible, to start investing each month. History has proven that even if you enter the stock market at its highest point, as long as you insist on fixed investment, you can still earn reasonable returns after a few years.
6. When should you sell?
It is best not to sell. The longer the investment is held, the less risky it is. Of course, asset rebalancing is still needed.
7. Should I really invest 10~20% of my money in high-risk investments?
If you only think about avoiding risks, you will miss out on a lot of money that you should get. There are almost no rich people who have never lost money, but there are many poor people who have never lost money.
No one who has never been sad has never been truly in love, and no one has become rich without seeing losses.
I myself once lost 500,000 in high-risk investments, but one of my high-risk investments earned me nearly 7 million. This is the same as venture capital investing in start-ups. It may invest in 10 companies. As long as one succeeds, it will not only cover the investment and the losses of the other 9 companies, but also make more money.
When investing specifically, you must invest in emerging markets, that is, rising developing countries, as well as small companies and small industries, but you must follow the following rules:
1) Only Invest in a market that you understand to some extent.
2) You should choose a fund in that market as much as possible, because the investment manager may be able to evaluate it better than you.
3) Only invest in markets that have fallen by at least 50%.
4) When making your first investment, invest up to 50% of the funds you plan to invest in the market. If the market improves, invest the rest.
5) Write down your revenue goals and stick to your plan.
As long as you keep doing it and keep learning, you are likely to become a smart investor within a few years. Please don’t underestimate your own power. Everyone’s rights are much greater than we think. .