My father is a legendary businessman.

Since childhood, he has often warned me: "In a person's life, money is very, very important. How important is it? - Money is always the second most important thing." What he probably means is that the most important thing will always be the second most important thing.

It will continue to change with changes in age, temperament, and worldview, but the second most important thing will never change.

Money is the most spiritual thing in the world.

Some people love money at all costs and become slaves to money.

Some people love money, get it wisely, and know how to teach money to be used for themselves.

In fact, what most of us pursue is not money itself, but the freedom that money gives.

The more money a person makes, the more choices a person has and will not be constrained by poverty.

The author wrote this article at the invitation of many friends, hoping to help the middle class with a small amount of accumulation establish a basic personal/family financial framework and grasp the important window period for wealth accumulation.

After all, how much money you can earn now is not the key. How you handle the money in the next twenty years is the key to success or failure.

When a person is in his prime and has accumulated a certain amount of money, he begins to feel insecure and thinks about more profound questions: How can he maintain and increase the value of his property?

How can we not have any worries?

These are questions that an adult should answer.

But before that, an adult should know what he is working hard to make money for.

It is true that some people regard making money as a hobby or a career, but most people pursue only one goal - financial freedom.

How much money do you need to earn to be financially free?

FIRE teachers from all over the world have given precise answers.

Before getting to the main topic, let us first introduce the history of FIRE.

About FIRE. FIRE is an abbreviation, its meaning is: FINANCE INDEPENDENCE RETIRE EARLY.

These four words are translated into Chinese as: "Financial freedom, early retirement."

This "sect", or more appropriately, a way of life, has grown to a small extent abroad.

People who choose this lifestyle have the same goal, which is to save enough money in the fastest way, complete retirement early, and start a happy life of loving whoever they want.

They never bind "career" and "making money" because the two are not the same thing.

In the book "Rich Dad Poor Dad", the author elaborates on the same view: "An important difference between the poor and the rich is that the rich buy luxury goods last, while the poor and middle class buy things like big houses, jewelry, etc. first.

Leather clothes, gems, yachts and other luxuries because they want to look rich. They do look rich, but in fact they are trapped in the trap of those who always have money, those who stay rich for a long time.

, build their assets first and then use the income generated by the assets to buy luxury goods, while the poor and middle class use their hard-earned money and the inheritance they will leave to their children to buy luxury goods.” In the FIRE movement, some

There are only a handful of pioneers who achieved financial freedom at the age of 35.

Most people hope to reasonably formulate a set of financial plans on how to reduce expenses, save regularly and allocate investments on the premise of having a certain quality of life. Although this lengthens the timeline for completing FIRE, it is different from the salary structure and manpower of ordinary people.

The resource curve is also very consistent.

Before setting any financial plan, everyone should initially calculate the number of years to complete FIRE based on the current income and expenditure situation, so as to facilitate financial tracking at any time.

The number of years you calculate may be very long, but don't be discouraged.

As long as you know what your goal is and move towards it, you will be like the white dragon horse in the West seeking scriptures, and one day you will be able to return the scriptures.

On the contrary, if you don't have any financial goals, you are like a donkey who has traveled the same distance, just standing still.

Let’s get to the point.

The formula for financial freedom taught by FIRE is: Financial freedom = 25 times annual expenditure, withdraw 4% every year.

In other words, if a person spends 200,000 yuan a year, then he needs 5 million to achieve financial freedom and withdraw 4% of investment profits as expenses every year.

This is a simple algorithm.

Of course, when applying the formula, you need to include all expenses of your children, parents, yourself and your spouse, multiply by 25 times, and divide the total amount by the annual savings (if it is a family unit, it is with your spouse**

*The same number of deposits (note that it is the number of deposits, not income), is the number of years required to achieve financial freedom.

There are many severe frugalists in FIRE. This is because severe frugality in the early stage will provide strong support for progress and is a great growth tool for realizing FIRE as early as possible.

This is a means of cutting expenditures. At the same time, reasonable investment, savings mechanisms and the application of leverage are also very important financial means.

After setting the goals, let’s briefly talk about the reasonable ratio of family/personal wealth management.