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The Four Quadrants Rule for Investors

I don’t think I can write the Investors Quadrant well. Maybe this will be an article that I will come back to write in the future. Because I have not personally experienced the lifestyle of an investor. But one thing is for sure, that is, they are different from what Fan Wei said in the movie "If You Are the One"...

Investors are the last quadrant and the one that truly achieves financial freedom. It is the ultimate destination for all those who desire financial freedom, that is, those who can truly live indefinitely without working and with a high quality of life. While life as an entrepreneur can be good, true financial freedom is only achieved once the business is on track and you can start investing in other people. In other words, only when a business owner begins to transform into an investor can he truly achieve financial freedom. I didn’t mention the pros and cons of the Business Owner Quadrant in my last article, but I will cover them in this article. Another thing please understand is that my attack on the left quadrant is not an attack on the people who choose this kind of life, but an attack on this concept. The purpose is to hope that you will start to think about the choices you are making after reading this. Did I miss something?

I think the biggest characteristic of investors is the threshold, and the threshold is money itself. Previously, in the article "Investment is a Continuous Snowballing Process", I mentioned that capital needs to be accumulated, and the speed of accumulation is very important. And for investors they already have a big snowball. From now on, just continue to grow bigger easily. If you are an investor, all you need is to learn the art of investing. Then you have a lot of time and money to do what you like without being burdened by survival. Maslow has a hierarchy of needs theory. Only by mastering the power of wealth can you be qualified to talk about the value of life.

The difference between investors and ordinary investors lies in the scale of investment, and they are good at using investment portfolios and controlling risks. People in other quadrants need to use insurance to spread risks, but investors themselves have been struggling for many years, their vision and experience are extraordinary, and they have the ability to control risks by themselves. Many people, like me, have never been in the water or learned to swim, so they have to instinctively stay away from the water. A good wave maker is very familiar with the water and frequently appears on the top of the wave, which is called white jumping in the waves. If risk is compared to water, people in other quadrants are the former, while investors are jumping in vain.

Investors’ assets are relatively high-quality assets. For example, investing in enterprises, establishing real estate companies, and establishing fund companies. Assets are mixed, and good investors need to have good eyesight to be able to identify them. As the saying goes, "A horse with a thousand miles of horse is often found, but a horse with a thousand miles is not always found." No one has a natural business acumen, it all requires a lot of practice. Therefore, an important quality for investors is an empty cup mentality. They need to hear many different points of view, even diametrically opposed points of view. Bad investors will go bankrupt and be wiped out by the market. I think the sign of a person's maturity is his or her ability to listen patiently to others. There are too many people in this world who have something to say, such as me. What is really scarce are listeners. Investors need to listen to different opinions and "go with the good ones." My article Can You Listen to Opposite Opinions? 》It’s talking about the quality of investors.

For example, what is relatively popular now are various investment funds. It feels like a phenomenon that accompanies the popularity of the Internet industry. Because the traditional industry model has always been very heavy, and is subject to geographical factors and past entrepreneurial environment restrictions, the speed has been very slow, and there is time to grow slowly. Many businesses rely more on borrowing money than financing to fill the gap in capital turnover. For example, if I want to place an order for production, I must first pay the supplier for delivery. It takes time for products to be transported to various locations for distribution, and consumers may purchase on credit. Due to these factors, it may take months or even more than a year for previous entrepreneurs to complete one cycle of capital flow. Adding transportation costs, inventory costs, and labor costs, the cost is very high. At the beginning, the scale was small and the market was small and I couldn’t feel it yet. Later, the larger the scale, the greater the demand for orders, and the problem of capital turnover became more prominent. More of a problem is borrowing money. Because there is profit from the beginning, and the development speed is not very high.

The Internet industry is different, and many business models are unprecedented. But it needs rapid growth, a certain number of users or a monopoly position to make good profits. In the past, it was losing money for a long time. Internet companies’ obsession with speed is evident. As the saying goes, "Nothing is strong enough to break, only speed cannot break." Moreover, it has entered the era of subsidy economy from the initial free economy. Those subsidies are actually the cost of education for the market, because many new things are not beneficial at the beginning, so how can they be accepted casually? And many Internet entrepreneurs are born in technology. If you look at the background of technical staff, they are basically grassroots. The real rich second generation has never heard of anyone who will engage in technology. These characteristics determine that Internet companies have a very large demand for financing. Sometimes basically whoever has financing can survive. Only when you have money can you grow quickly and explore your own business model. Otherwise, it would be very unhealthy to never make a profit. This has given rise to a hot Internet investment market.

When investors have an empty cup mentality, they can learn from entrepreneurs with an open mind. In fact, it is difficult for anyone to give an accurate answer to the future. They are all betting. After all, not everyone is Steve Jobs. How to use the empty cup mentality of investors? It seems to have been mentioned in a lecture given by Chen Wei of Love Space.