How should you deal with the uneven distribution of social wealth?
Will you become wealthy by working hard to earn and save money?
If we imagine wealth as a bucket, many people think that by working hard to pour water into the bucket, the water inside will increase.
However, the actual situation is that inflation is like a hole in the bucket, and the water poured in will continuously leak out through this hole.
So no matter how hard you work, this bucket will never be filled.
People with economic awareness often think:
Work hard to earn money, turn money into assets, and then let the assets compound to form more assets, making money for themselves.Assets can protect against inflation, so the rich man's barrel is not leaking, and due to the appreciation of assets, the water in the barrel will keep growing by itself, only getting more and more.
If we want to change these issues, we must first change our inherent views on money.
In the future, when dealing with issues related to the size of money, we should learn to think about current matters with a future-oriented mindset.
The previous article mentioned that the debt of buying a house is actually an intangible wealth, and debt is wealth. The article also elaborated on this point in detail, which is worth everyone's consideration, and those who are interested can read the previous one.However, it is important to note that one should not hear this and feel that the debts they owe to Huabei, BaiTiao, and online loans are all profits they have made...
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It must be understood that it is only beneficial to you when your debt interest rate is lower than the inflation rate of 7%.
The real interest rates of Huabei, BaiTiao, and online loans are all above 14%! The more of this kind of debt you owe, the sooner it will eventually crush you.
For example, when you lend money to a friend, do not avoid discussing the interest rate just because of the relationship and face.If a friend borrows 50,000 from you and returns it to you after 5 years, you are actually at a loss! The 50,000 in 5 years is significantly different from the 50,000 now.
Another important point is to cultivate an investment awareness from now on. The sooner you practice within your means, the better.
For money, you can have a basic distribution awareness. The correct approach should be to divide your money into three parts:
1. Money needed in the short term
For example, monthly living expenses can be placed in Yu'e Bao or other money market funds. Although the returns are low, it's better than nothing.
If you don't know where to find a money market fund with a higher yield on Alipay, I can tell you a method.Following the operations mentioned above, you can directly switch to a money market fund with higher returns within Yu'e Bao.
2. Money for preservation of value
This type is basically money that won't be used in the short term, but will be needed within 1-2 years. We can use it to buy assets like gold and bonds that can achieve the effect of preserving value.
Gold is a hard currency, and its price will continuously increase with inflation, with high security. The return on bonds or bond funds is about 6%-7%, which is not high, but just enough to offset inflation.3. Money for Increased Investment Returns
The type of money we need to pursue is high-yield growth of 10% or more.
If you can maintain this growth in returns annually, then your money will generate a compound interest effect, forming a geometric increase.
This is also the method with the highest probability for ordinary people to achieve financial freedom.
How to achieve a return of 10% or higher?
One method introduced above is investing in bank financial products, bonds, or bond funds, which have low risk and high safety, but the return rates are generally not very high, usually not exceeding 6% - 7%.If you want higher returns, you must invest in riskier equity assets.
However, the reality is that stocks are not suitable for most people to invest in.
Although stocks have high returns, the risks are also great, and ordinary people without investment experience are prone to losing money.
So the best choice for ordinary people is to invest in index funds through regular fixed investments.
Index funds invest in stocks, and compared to individual stocks, the risk is greatly reduced, and the returns are also quite good.If you adopt a fixed investment strategy for long-term investment, achieving an annual return rate of 10% or higher is actually not difficult.
Index funds require us to manually conduct investment operations, so it is necessary for us to understand certain operational strategies and methods.
Buying blindly can also lead to losses. The skills and methods of fixed investment will be introduced to everyone later.
The acquisition of wealth is inherently a zero-sum game, and human nature is to pursue profit for oneself.When a segment of the population has a better grasp of the laws and methods in the operation of wealth, naturally they will accumulate more wealth in the pursuit of profit.
Those who do not understand these rules will inevitably see their wealth decrease, which is a natural law that occurs.
If you were to switch places, you would do the same.
Therefore, many wealthy families place great emphasis on their children's financial education from a young age, because they know that the production, maintenance, and growth of wealth all require support from cognition.
Many children of the wealthy are well-versed in the nature and laws of money from a young age, and in this regard, they have already surpassed many of their peers.However, most parents in ordinary families do not pay attention to this aspect of education, and society does not teach these things to their children.
Many people in their twenties still have a blank understanding of the operation and essence of money.
In the eyes of a small number of people, money itself is a perfect production tool, a numerical game. As long as the rules are mastered, it can continue to grow autonomously.
But in the eyes of most people, money is just a bill for consumption, and they simply believe that money can only be obtained by selling labor and time, and are trapped in the cycle of making money and spending money for a long time.The so-called inheritance of social strata is not the most terrifying aspect of poverty, but rather the cognitive poverty it entails.
If you are born at the bottom, what your parents and elders tell you may not necessarily be right; you should maintain your own thoughts.
The best approach is to proactively expand your knowledge, learn from those you consider to be impressive, and strive to discover a larger world, instead of blindly following the values of the people around you.
In this way, you will not let your life drift along with the tide.
It is undeniable that most of our parents are not perfect. Perhaps every time you go home for a meal, your parents will tirelessly impart many principles to you.At their advanced age, they always strive to impart something to us. Perhaps much of what they say has become outdated, or may not be correct.
However, I hope you do not feel impatient, but rather show more understanding and consideration.
After all, their cognition is also limited by their social circles and the era they belong to, just as their parents could not tell them these things.
They have given us a lot, which may not be perfect, but I believe it is the best they could give us, having done their utmost.What we need to do is to start changing this situation from ourselves. In our spare time from work, we should take some time to learn about economics and finance.
Understanding some knowledge of economics can help us to understand the distribution and operation mechanism of the society's wealth from a more macro perspective.
When you can see the operation of society from a higher dimension, many things you encounter in life will be easy to see through the essence, and many decisions will be more correct.
Learning financial knowledge is to help us better do personal investment.
Because investment is actually the best way for us to protect and accumulate wealth, and it is also a must-learn lesson for everyone in life.Because you will also become a parent in the future, or you are already a parent of a child. We need to understand that the knowledge we accumulate now is also accumulating for the next generation.
When our children are still young, we can tell them:
The laws of operation of this world;
The nature of human nature;
The distribution and flow of wealth;
Why they do so;What has led to their current situation;
What things are important and what things are not important......
These are the things that truly determine a child's perspective, rather than blindly following the trend and thinking that enrolling children in special classes is a win at the starting line. The real starting line is not there.
Most of the problems in our lives are actually caused by money, and we must learn to solve money problems.
For you and me, the significance of this sentence is the same.
I hope that from now on, you can all understand how to deal with the reality of wealth inequality.
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