100 help plan
As long as you live within your means and spend less money than you earn, even if you are just a person with average investment ability, you can become very rich in your life. — Warren Buffett
Hey friends, welcome to my home, this is the 9th original article I shared, I hope to improve a little bit with you every week.
This article is from Jonathan Cremon's "Money Super Thinking", interested friends can read the original book.
This book is very popular in Taiwan, so it is only available in traditional Chinese and English, and we can't see it here. This book is a great book for financial planning. It can change the wrong perception of money that we have always had, which may be ** your parents, or ** the top of society does not want ordinary people to know the correct cognition.
Let's start with the conclusion, the author's "start with the end in mind" way of thinking tells usWhen ordinary people step into the society on the first day, they should make financial rules around the ultimate financial goal of "retirement".Stroke。All life is equal, and when you reach a certain age, you are destined to be unable to continue working. But not being able to work doesn't mean you don't have money to spend, and all the assets you can accumulate for yourself while you are able to work will be your protection in retirement. On the contrary, if a person does not have any assets and no pension, after retirement, he can hardly support himself except for continuing to sell his unprofitable labor.
Today, when I saw a big guy talking about the concept of wealth, he mentioned that wealth is not only about money, health, happiness, life experience, family relationships, etc. are all part of wealth. We can't take how much money we make as our life goal, because this number will definitely be diluted for various reasons, but we can buy assets after making money, and we gain time after making money from assets, and time gives you time to exercise, spend time with your family and children, and travel to experience different lives. Then at the end of your life, when you lie in the hospital bed and think about your life's wealth, it is not a cold number, but a perfect life journey experience.
For fresh graduates from ordinary families, the first thing you do when you first enter the society is to make money, and after making money, you have to think about two things, first, what is the meaning of money to people?Second, how to do financial planning?
The meaning of money
If we want to build a happy and successful financial life out of our own money, we must abandon the misleading conventional wisdom and ignore the self-serving methods that others have so much to promote. What we really have to do is find the right way to rethink the meaning of money.
Can money buy happiness?Some people say yes, some say no, and some even say that money makes them miserable. But in fact,Money can buy happiness, but the degree of happiness is different, divided into a material level and a psychological level. InThe material planeFor example, if you buy a dream new car, you must be happy the moment you own the car, but when these things such as follow-up refueling, insurance, car loans, and small bumps on the road appear, the happiness you get about the car has long been gone. There is another kind of:Psychological levelYes, when you spend money to organize your family to go on a trip, you need to prepare a lot of things, but when you go out to play, you are happy, and when you see this trip many years later**, you can still recall a lot of happy things, and this happiness is always there.
Humans have three basic psychological needs, competence, belonging, and autonomy. When these are satisfied, happiness is attained. And this corresponds to three ways to buy happiness with money.
Competent: Take control of your wealth and reduce your debt. Having money can alleviate financial anxiety and make us more autonomous. Financial planning must be designed from the first day of earning money and executed continuously, so that when you can't work one day, you have enough money to live without working.
Autonomy: Having money allows you to do what you love and are good at. When you have money, you don't try to please others for money, but do things that you feel are truly valuable.
Belonging: Having money allows us to spend special moments with the people we care about. Creating shared memories with family and friends is the happiest thing to spend money on.
Financial planning
With the advancement of medical technology, the life expectancy of human beings has increased significantly, so normal people will live a long life, and if you want to live a financially free life in old age, you must do the following four things as soon as possible. The first is to do financial planning as early as possible, the second is to focus on the work we are passionate about, the third is to adopt a long-term investment strategy, and finally not to worry about your early death, but to think about a long life in the future.
For recent college graduates, if you want to achieve financial freedom as soon as possible, don't choose what you dream of but don't have money, but choose the highest-paying job as much as possible, and thenSave money early to accumulate your first pot of gold。Then during this time, I will learn various financial Xi (or read my reading notes), try different investment methods, and when I have a certain amount of wealth, I can do what I want to do, without thinking about whether it can bring money.
There is a gas station waiter in the United States, Ronald, who has worked in gas stations for more than 40 years and has always been an inconspicuous ordinary person. But after his death, it made international news because he left behind an estate of more than $8 million, and the way he built his wealth was simply to live frugally enough + turn the money he saved into assets + live long enough. What this story tells us isStart financial management as early as possible, time has a compound interest effect。The financial management I am talking about is not for you to go to ** you don't understand ** or **, but you should learn Xi what kind of financial management is more suitable for you. You buy the **, you have to know why you bought it, and what reasons can make you stick to it for 5-10 years after you buy it. If you don't know, it is recommended to stay away from **, and you can invest in the index**.
The innate structure of our brain can easily lead to financial imbalances, so rational financial management should have a strong psychological quality. Short-sightedness, loss aversion, overconfidence, and believing in the grapevine are investment instincts that everyone has, but we can change this perception through deliberate XiEstablish a long-term investment philosophy
1) Accumulating cash through savings is nothing more than reducing fixed expenses and increasing income.
2) Learn the mindset of investing. This is more difficult, when you can know the true value of a **, when the market is lower than this value, you dare to hold, when it is higher, sell decisively, you can get profits.
3) Set up a portfolio, this portfolio in different age groups, the tendency of investment products is different, young wealth is less, you can invest more in high-risk middle-aged people have a certain amount of savings to increase investment in bonds and fixed income, reduce investment. Then your assets are not only ***, but also real estate, insurance, etc. to protect your future life.
Summary
In fact, the main idea of this article is very simpleAs soon as you get your first income, it's time to plan financially for retirement。For most children from ordinary families, the parents' generation has little financial management ability and no opportunity, some are lucky to have a pension, and some even have no bank deposits or jobs. But for our generation, it is impossible to give you a stable pension in the future fertility rate, and the path of retirement for my parents' generation cannot be repeated in us, so we can only establish this concept of financial planning for retirement just after graduation and start to act.
Finally, let's end with the author's 12-point advice on finance, read it often.
1) We prefer the use value of things, but we are happier to spend money on experiences.
2) We should spend money to spend special time with friends and family.
3) When we have time to do what we love to do, we should plan our lives well.
4) We should not worry about dying early after retirement, we may live longer than expected.
5) Our investments should not be measured in months or years, but in decades. Focus on long-term value assets.
6) We should keep our monthly fixed costs as low as possible.
7) Develop good saving Xi, which is difficult but must be done.
8) Don't seek to defeat the best gains, the more you want to beat, the more you will fail.
9) Never forget the fundamental value of **.
10) Make retirement your first financial goal.
11) We should take a macro view and plan our finances based on the revenue we can generate.
12) Our goal is not to become rich, but to live the life we want after having money.