How to Achieve Financial Freedom

 In today’s article, I will combine my own years of work and investment experience and share some practical ways to make money with you.

Guaranteed to be good, it must be worth your patience to finish reading.

1. What is financial freedom?

When it comes to financial freedom, everyone may want to ask: How much does financial freedom cost?

The question that really needs to be asked is actually: Is there a 5 million, 10 million, and then lying at home and doing nothing? This is financial freedom?

Actually it is not like that.

You see, Sam Walton, the founder of Wal-Mart Supermarket, after he became the richest man in the world, he still gets up at 4:30 every day and works hard.

Lying down is not financial freedom.

The correct definition of financial freedom should be: You don’t have to do things that are meaningless to your life for money.

For example, someone will give you 10,000$ a month and ask you to sit in the office and do nothing. Don't do this kind of work.

Because doing this kind of thing is a waste of time and doesn't make much sense in life.

There is basically one path for ordinary people to achieve financial freedom, summed up in 6 words: work first, then invest.

2. Let's talk about work first

It cannot be denied that the first pot of gold earned by most ordinary people is earned through work.

As long as you are not a rich second-generation, work is extremely important to you.

How can you make more money at work?

Let's analyze the nature of work.

We are in a commercial society.

To create value in a business society is to make products and then sell them to customers.

Therefore, the most important thing in a business society is to focus on two ends, one is the product, and the other is the customer.

You want to have unique value in this society and earn more money.

Either you can make a product that no one else can do, or you have the ability to sell the product to customers.

Okay, let’s talk about the first way: creating products

Give two examples.

I am a former colleague, and we joined the company together. When we go to work, we all go out to have fun after work, parties, etc. He just typed codes at home every day.

Later I learned that he had developed an intelligent customer service system by himself.

Because the thing he developed was so awesome, he later resigned and started his own business. Now he is the No. 1 in the smart customer service market.

Now that it has raised three rounds of capital, the proper capital market unicorn is about to go public. This is to grasp the product side.

I also know an English teacher from New Oriental. I have experienced his English courses for postgraduate entrance examinations. Even if I have studied English for 3 to 3 months, I can pass the postgraduate entrance examination.

He summed up each question type to a very practical play.

For example, for a big composition, he asked me to practice the calligraphy first, and practice that kind of very well-behaved young round body. After the font is written, it looks like a clean little girl writes it.

Because he concluded, the marking teacher will give high marks to the little girls who love to clean, even if the content is very general, it does not matter, because the marking teacher will feel that it is not easy for girls. If they fail to pass the exam, they will cry very much. awful. He also grasped the product side.

As large as a customer service system or as small as an English class, you can make products that other people can't make and customers like. This is unique value and will always be competitive in society.

Of course, it is difficult to make products.

It doesn't matter, we have another side to grasp-customer relations.

Everyone needs to know a basic concept: there are barriers to access to information.

For example, in my hometown, a small mountain town on the 180th line, with beautiful scenery and nothing.

There is a young man I know who graduated from junior high school.

He found that although there was nothing in his hometown, there was one thing that was not good-the local honey was of good quality because of the good air.

So he started to add knowledge about honey, and talked about honey, he can talk to you for half an hour.

Then he started to sell honey, set up a stall at the entrance of the tourist area, and tasted it for free for out-of-town tourists, added WeChat, and made honey knowledge popularization for tourists on WeChat.

Because he spoke patiently and the quality of the honey was indeed very good, many tourists from other places became his iron fan and helped him to promote it.

When I chatted with him last year, he said that his annual income is now more than 300,000$.

The cities earn more than 300,000$ a year, and everyone around him earns 30,000 to 50,000$ a year. This is the power of customer relationships.

Since there are barriers to obtaining information, no one can become an expert in all aspects of life.

Therefore, when you choose a product, you need reliable people to make suggestions.

If you are reliable, professional, and have a way to let others know you, then you will have this customer relationship and it will be irreplaceable.

This path is a path that most of us can take.

As long as your usual work is in contact with people, you can do this.

Whenever you come into contact with someone, you treat each other with sincerity and show others professionally.

Gradually, you will become an expert in this field, irreplaceable.

To sum up, either you have mastered the product side or you have mastered the client, even if you don't have a lot of money at this time, in fact, you are already very free.

Because what you are busy every day is something meaningful to you.

Moreover, you have been doing something that is very competitive in society, and it is impossible not to make money.

Even if you don't start a business in the end and have been working in the company, you will become an indispensable person in the company, and your boss will give you a high salary.

Because I'm afraid you will run away.

Before the age of 40, the most important thing is to understand what you want to do in your life.

This is what Confucius meant when he said "Forty is not confused."

3. After talking about work, let's talk about investment

The word "capital" in investment refers to assets.

We usually say that a person is rich, not that he has a lot of cash in his family, but that he has a lot of assets.

There are several assets in front of us, including:

Stocks, houses, bonds, cash, and commodities such as gold and oil, as well as consumer goods such as cars, mobile phones, and bags.

Investing is actually dividing your money into stocks, houses, cars, bags, and so on.

Different assets have different appreciation capabilities.

The well-known American scholar Jeremy Siegel, in his book "The Magic Weapon of the Stock Market", has counted the returns of various assets in the United States for more than 200 years.

In the United States, the long-term return of the stock market is around 10% annually.

The bond yield is around 5%.

Gold is around 3%.

There is no benefit if you directly hold the U.S. dollar.

The situation is similar in China.

The Chinese stock market can also provide an annualized rate of return of 10%.

The bond is around 4-5%.

As for the house, under the background that the homeowner is not speculating, the house in the first- and second-tier cities can probably get at least 5%-8% of the income.

The income of holding cash is also 0.

As for luxury goods and consumer goods, from the moment you buy them, they begin to depreciate. For example, if you buy a car for 200,000 yuan, it will be worth 150,000$ in the second year and 100,000$ in the third year.

So buying a car as soon as you graduate is definitely self-harm.

In our conventional concept, money means cash, right?

However, cash is an extremely bad one among all asset classes.

On the Forbes rankings, the money of the richest people is rarely cash. More than 95% of the money is in the form of investment, and it is mainly assets that can quickly increase in value.

For example, 95% of Warren Buffett’s money is his company’s stock.

However, our salary is generally for you to find cash, right.

What you buy with cash determines when you can be financially free.

If you spend all your cash, such as buying cars, bags, perfumes, clothes, such products that continue to depreciate, then no matter how much money you make, there is no way of financial freedom.

For example, there is a big brother named Edwards in the United States. He won a grand prize of 27 million US dollars in 2001.

Comrades, 20 years ago, 27 million dollars, dollars, and spent ten lifetimes.

But after they bought the luxury house, they bought hundreds of luxury cars and parked a few rows in front of his house.

It made his neighbors say whether they moved to a 4S shop next door.

Later, he bought a private jet, several racehorses, and all kinds of strange hobbies. I won't talk about the specific details, for fear of being keyworded.

In less than 5 years, he had spent all his money and owed more than one million dollars to others.

Finally, over 50 years old, penniless, died alone in the country.

This is the end of someone who gets rich overnight but doesn't know how to invest.

It can be seen that it is useless to have money alone, and you have to know how to invest and know how to allocate assets.

Otherwise, you will spend all your money.

How should we allocate assets?

Peter Lynch, a well-known American fund manager, mentioned a relatively simple configuration strategy in the book "Peter Lynch teaches you financial management".

The first asset young people should allocate most is your first home.

When your money is not enough to buy your first house, you can learn to invest in index funds first, and slowly accumulate assets.

The so-called index fund, you can understand it as: the fund company sells the stocks of the largest and best companies in the stock market to you.

As the fund you buy continues to increase in value, you will save money faster and faster.

When the money is enough, buy the first house.

For the money you make later, you can continue to invest in index funds and continue to increase your assets.

Some students may ask: When does the value increase?

The answer is: there is never an end.

Have you ever seen a rich person who said after he had 5 million or 10 million, I don’t need my money to increase in value, that’s all.

Those who have really mastered investment knowledge will not draw a line to tell themselves: This is financial freedom, and there is no need to go any further.

After mastering the code of wealth, you will only get richer and the snowball will only get bigger and bigger

Of course, there are still some details that need to be mastered for the fixed investment of index funds, and it is definitely impossible to buy directly without thinking.

In general, even if you don't have a lot of money now, after the right investment, you will still live better than before.

You can also let your next generation start his life from a higher starting point, which is another meaning of learning to invest.