This same phrase is at the heart of this book, which will tell you what an asset is and what a liability is. Simply put, an asset is something that generates money, something that keeps money flowing to you. A liability is something that keeps money away from you. Economists define those who take out one-third of their income each month to pay off various debts as highly indebted.
To make money, you have to understand money, and the principles and mechanisms of how it is created, and after reading this book, I'm sure you'll have a whole new understanding of money.
What is financial intelligence? Financial intelligence is an attitude toward money, refers to a person's ability to survive in this economic society, is to judge a person's acumen for earning money, accounting, investment, marketing, legal ability to reflect the synthesis.
Financial intelligence requires two main abilities. The ability to recognize the law of money, the ability to correctly apply the law of money
Financial intelligence has nothing to do with how much money you make, financial intelligence is the measurement, is an indicator of how long the money will work for you, as you get older, how much freedom, happiness, health, and if all of this increases, how much freedom, happiness, health, and if all of this increases for you, how much freedom, happiness, health, and if all of this increases. Then your financial IQ is also increasing, if you are getting more tired and unhappy the more you live, then your financial IQ is decreasing.
For example, the gold rush in the United States, a lot of people go out of their way to pan for gold, but the ones who really get rich are the ones who sell jeans. Then there's Tyson, the boxing champion, who was sitting on hundreds of millions of dollars in '90, but ended up buying a bunch of debt and filing for bankruptcy in '05. With only ￡3,000 left, the debts were upwards of ￡14 million, ￡9 million of which was all income tax. All of this is a reflection of financial intelligence. So it doesn't matter how much money you make,
what matters is what you do with it. If you lack financial intelligence, I'm afraid that giving you a sum of money will be a disaster.
Harvard professors say that financial intelligence and IQ and EQ, side by side to become indispensable to the modern society of the three major qualities, if you have a high degree of education, you have IQ, if you can quickly appreciate in the workplace you have EQ, if you are very early to realize the freedom of wealth you have financial intelligence. If you do not have a high degree of education, and can not mix in the workplace, then financial intelligence is your only chance to turn the tide.
The American oil king Rockefeller has this confidence, "Even if you put my clothes naked into a desert in the middle of nowhere, as long as there is a caravan passing by, soon I will become a millionaire again."
Financial intelligence is more than just making money and managing money, spending money is also a kind of financial intelligence. Some people always spend a small amount of money to do big things, while some people are always confused, the money do not know how to spend it is gone. Harvard financial education, encourage people to children from childhood financial education, first teach them to spend money, such as the new year's money to the children to keep, in addition to no additional payment, so that the children from childhood to form a savings plan, spend money on budget habits.
A lot of people are complaining that we don't have a good father, not a rich second generation. In fact, the real benefit of having a rich dad is not how much money he gives you, but he will tell you the code behind the money, while poor dads usually only tell you to study more, go to a good school, and try to get a good job in the future. In the end, you will find that, so what if you graduated from Tsinghua University and work for the Fortune 500, but you can't compare to Zhang Ergu, who skipped school and played games when he was a kid, and he is now a big boss. Even some students just after 40 years old can realize wealth freedom, and you still have to worry about delayed retirement.
Establish a correct view of wealth
Money is just a tool. If you do whatever it takes for money, then I'm sorry, what you will lose is what is hidden behind the money, the pursuit of money is not our purpose.
Harvard professors say, money is not wrong, but the wrong on the money on the breeding of those greed and fear and ignorance, these are immoral, if a person takes the money as the purpose, he is no longer a tool, then the money will be completely changed flavor.
Money is the basic threshold of a life, and there are many things that money can't buy, but they are all based on other goals that you have to pursue in your life after you have money.
In other words, with money in your world, you have the right to pursue love, friendship, affection, and ideological and moral liberation. On the contrary if you don't have enough money, then I'm sorry, the only goal left in your world is money. So how can you make money, first you have to be filled with the love of money, and is to show this love, rather than like a poor scholar, ashamed to talk about money, you feel that having money is a matter of shame, then he will really not patronize you.
The Harvard professor's study said that before industrialization, European farmers spent only one-third of their time on production, and the rest of the time they were lazy. He said it was the lack of hard work that caused them to be poor, but that conclusion has become less and less applicable, and now we are often surrounded by people who claim to be busy as dogs. But still poor. So why is this?
You don't have the intelligence
No ambition to be rich
? No courage
? Too lazy
Too comfortable, just want to be stable and rest on your laurels.
That's probably what the book says.
In the Jewish world, there is a story, the staff asked the boss, how can I be more diligent, to be as successful as you, the boss listened to laugh, he said how do you know I am very diligent? When I was working for someone else, I was indeed more diligent than all of you, but I have long since stopped being so diligent, but I have made more money. So getting rich isn't about hard work, it's about me being able to find an opportunity to provide positions that make other people work hard. It's far more important to get others to be more industrious than it is to be industrious yourself. So that's what it says in the Talmud, the Jewish business scripture, that instead of burying your head in the sand it's better to use your brain more.
For example, some people choose to go to McDonald's, some people choose to go to the courier. And have a brain like Warren Buffett and Peter Lynch they have chosen to go to the golf course as a caddie, making money are in the second place, where you can get in touch with more rich people. Over time you get infected with all kinds of rich people thinking. So this is the same in the effort, the effort of different places, the results are very different.
The book also mentions the core element of making money, integrity. In the economic society, credit is actually more important than life. Once a person loses credit, it means economic death, not to mention getting rich, I am afraid that survival will become a problem. For example, Russia, when owed the United States hedge fund money, and then decisively do not pay back, the surface seems to take advantage of a great bargain, but less than 30 years, Russia's economy has fallen behind, the economy is not even large enough to our Guangdong Province.
Higher education has nothing to do with financial intelligence, on the contrary, the low education of the people they earlier contact with society, know the importance of money,, often their financial intelligence is higher. For example, the chairman of the Chint Group, Nan Cunhui, he is a shoemaker's son, as a child in order to eat early had to follow his father to do business on the streets. Help others repair shoes. Because of good craftsmanship, and business is more honest, so the business is red hot. After that, he got a counter to sell low-voltage electrical appliances, did not earn any money, but he just think it is a business, even the family house mortgage into a switch factory, so all the way to find out, all the way to do, but also the family's assets are hitched to the future of the Chint Group. It is estimated that if he had a serious factory job, he would not go to do such unreliable things. That's why people sometimes have to push themselves a little bit to have potential. The days are too comfortable, it is not far from the outdated.
Financial intelligence and age also has nothing to do with, for example, some of the elderly, the money spent on unimportant places, the result is that life is more and more urgent, a lifetime of thrift, and finally found that there are many new clothes have not been worn, the money did not save, but instead of being eaten by inflation a large part of the property.
Having said that, how in the world does the ability to make money come about?
The author says this is the same as learning to swim, only if you repeatedly practice in the water, when you have a feel for the water, you can learn to swim. Here is a story about a poor man who came to a rich man's house and said can I work here for three years, no salary, just food and shelter. When the rich man heard this, he then agreed. Three years later, the poor man left, and then he actually made a career, richer than the rich man. It turns out that the poor know their own lack of businessman thinking, so to the rich where on the free three-year college, and these things in the classroom is not to learn, if the teacher really understand these, then he has long stopped teaching. So the best way to learn financial literacy is to mix with the rich.
With the trend to move. 80's Shougang workers scenery, but 30 years past, Shougang workers or Shougang workers. And those who went into business in the 80s have long since changed. But to make sure you are changing with the trend, not by the trend and change, by the trend and change you are certainly the last group of people.
Independent thinking is essential, Graham said, there are two conditions for success on Wall Street, the first is to think correctly, and the second is to think independently, when you have nothing, your mind is your asset. At the beginning of the rich people's fortunes, without exception, they all think in reverse. 1967 Hong Kong's social instability, everyone chose to flee Hong Kong, the property market plummeted, but Li Ka-shing turned to real estate, a large number of real estate acquisitions, and finally the four kings of the status. For example, when the brothers Liu Yongxing did not go to university, returned to their hometown to raise quails, and ended up making money. So ten miles and eight villages have seen, have gone to raise quail, the results of this brothers are really too high financial intelligence, they decisively ashore, they do not raise quail began to provide the sale of feed, the result is that because of raising quail too much, so there is no money to be made, but the Liu family brothers of the hope that the Group has made a lot of money. There are two years the Internet to the traditional industry impact of the seven pieces, all industries are not small impact, entrepreneurs are simply tired ah, this time someone out to do the explosive product boot camp, to tell you about the Internet company to do a successful product cases, to take you to the Internet transformation. So entrepreneurs tend to rush. Anyway, regardless of whether you finally transformed into a success, people have been successful.
Being good at managing connections not only makes friends, but also allows others to use them for their own purposes. We all know that Bill Gates is the richest man in the world, but few people know that Bill Gates' mother is a director of IBM, and it was through his mother's relationship that he got his first big order. Warren Buffett's dad is a congressional official, the kind that can directly find the CEO of Goldman Sachs. The easiest way to stock up on contacts is to suffer losses, which, to put it bluntly, means letting others owe you. As the old saying goes, it's a blessing to suffer, and that's the truth. A person always suffers losses, and will let others owe him more and more favors, and finally wait until he wants to use the time, these contacts will be zero-deposit. And the most unlucky are those who never take advantage of small advantages and refused to take advantage of the people, to take advantage of all the small advantages, the results of the last time to use people, others know that this is a love of taking advantage of the people, so no one will help him. It's best to stock up on a few know-it-alls, that is, the kind of people who are good at making connections. They may know a lot of people, and all you need to do is maintain a good relationship with him, and he will be able to introduce you to a steady stream of useful contacts. This kind of person is a shortcut for you to open up your network. Now communication is very developed, a variety of circles are being established, then you want to become what kind of person, you have to mix to what circle inside to go, if your circle of friends, all are walking the dog aunt, at best you are a neighborhood committee director, or square dance organizer. In the end, to their own network of a class, those who are useful to me, those who are consuming me, I should learn from those people.
U.S. President Abraham Lincoln said that the only way we can eliminate our enemies is to turn all of them into friends. Either you die or I live to make money business don't go to do, win-win to long, the so-called big business are the achievement of others at the same time to bring wealth to themselves. If you think of the trick to get rich, but at the expense of others, then certainly not long. To help others is also, the achievement of their own is also a reflection of financial intelligence, the oil king Rockefeller put their hands 8.7 million dollars of land donated to the United Nations, and so the United Nations moved into the land, the surrounding land prices immediately soared, Rockefeller therefore earned a few times the donation of land money.
Borrowing chickens to lay eggs. The poor are more likely to lend money to the rich to help them get rich. The poor usually go to the bank and ask if this product is guaranteed and interest-protected, lend money to the rich, and collect some interest themselves. And the rich lending money to others things when usually want the shares or convertible bonds, when you earn big money, I have to earn more. However, borrowing money to make money is a manifestation of financial intelligence, while borrowing money to spend, it is still a manifestation of defeat. Before you borrow money, make sure you have surety insurance. Think about the bank's mortgage, it's still not enough to have proof of your income, he has to take your house as collateral. So you should also learn from the bank, see the opportunity to make money, be sure to find another security.
Learn to manage your money and use the power of compound interest. The sooner you start the better, firstly, the sooner you start, the longer you'll have later. The greater the returns you will generate with compound interest. Second, the earlier you start, the less tuition you will pay due to the small amount of principal. When you try to learn how to invest money later when you have more money, you will probably end up losing a lot of money. Then can you learn the knowledge to invest without losing money okay. The answer is no. Speculation and business as well, never wait to be ready to go into the water, in fact, you can never be ready, as long as there is the intention to act as soon as possible, a lot of things are done to do out, if you always think of everything is ready, then you will never start. Then it is necessary to establish the idea of a fine line, and never be too greedy. Must know what is a reasonable rate of return, such as lending products to give you a 15% rate of return, this is not normal, his reasonable rate of return is only 5% only. And the stock market is also in the long term to have 10% annualized return, short-term there may be a loss of money. Financial scams have become more and more common in the past few years, and in the end, it is still the result of social impatience, too many people want to make quick money. But know that you see the interest, and people are staring at your principal, it is the use of your greed, give you a little sweet, you'll be fooled.
Fund investment is the average investor's best financial means (investment risk, to ensure that your money at least five years do not have to you to enter the market, the stock market short-term look at the earnings fluctuations, long-term look at the average return of annualized %10 or so, and fixed investment is not a blind investment, it requires knowledge and skills), his principle is not to earn fast money, do not bet on the direction of the slow to buy a relatively low point, sell a relatively high point, thus earning a mid-range income. Thus earning a mid-range return. Some statistics you put your money into all the funds, dead hold, now the fund gives you an average return of 19% per annum, so why is it so simple, people still can't get it right? Not only did not make money, but lost money? Mainly because of greed, Buffett said greed and fear, these two infectious diseases will always appear in the investment community, Li Ka-shing said, 1% of the greed, will destroy 99% of your efforts, many people are so destroyed.
This kind of investment is suitable for saving for children's education, saving for your own pension, and so on. It will be used only after ten years. For example, take out 10,000 dollars a year to invest, the return on investment is not high only 8%, 30 years later you will have 1.13 million, when the annual 8% yield for you to generate 90,000 dollars of income, which is about 2 times your pension, at this time you are only 55 years old, you should be able to retire early. Remember, the higher the return, the higher the risk, and short-term investing is gambling, which is extremely risky.
Taking risks is fine, but gambling is not. Risk said this thing into a few times the profit, if the loss of up to thirty percent, the probability of success of this thing is seventy percent, which is called risk. Gambling, the same probability of earning and losing, do not do it into I do not know, the probability is not more than fifty percent. Simply put, if the probability of over fifty percent is risky, not more than fifty percent is gambling.
Where you spend your time, where your achievements are, if you want to learn to invest, then read at least 500 books on investment. If you don't know anything, you will enter the market and become a leek in the eyes of others!
Finally, a story. A farmer saved a large landowner, the landowner in order to repay him, the landowner said, before sunset you run to every inch of the land belongs to you, so the farmer desperately run, 2 hours later, he has had a lifetime can not be used up the land, but he is not satisfied, can not run continue to hold back strongly, and finally died of exhaustion on the road.