Managing money is managing life. If you don’t manage money, money will not care about you!
1. What is financial management?
Financial management, from a young age, is about establishing your own financial management logic system. By taking care of our finances, while properly managing daily expenses, we have been working hard to increase passive income, and finally embarked on the road of making money just by sitting down. The three cornerstones of wealth growth – principal, interest rate and time, form the core of entry-level financial management and minimalist investment. Reduce risk by diversifying your investments while broadening potential avenues for increasing income.
Financial management, from a broad concept, also includes the source of wealth, consumption concepts, rich people's thinking, how to use five insurances and one housing fund, fixed investment in funds, gold preservation, stock trading, investment evaluation, etc.
Managing money is also managing life. Investing in yourself is the best investment. Investing in yourself here does not mean buying luxury goods, but investing money in projects that can improve our work skills or competitiveness, such as training, courses, work, fitness, etc.
True stability comes from the ability to control money. Only when we build a logical thinking system that suits our own situation, and can effectively integrate and flexibly use resources such as money, wisdom, experience, and connections, can we truly feel the true meaning of freedom and gain true stability.
2. Correct understanding of financial management
Financial management must first get rid of cognitive misunderstandings: Don't wait until you are very rich before you manage money. Think about your life beyond the limitations of money. It does not mean that you will have money in the future and your life will be good if you have a good job and high income.
Of course, financial management is not about getting rich overnight. You have to dig your own moat and choose the right products.
In the field of investment and financial management, the first priority is to improve personal cognitive abilities, because the key to profitability often lies in information asymmetry and cognitive differences. Fundamentally, investing is the financial manifestation of our overall cognitive level, which translates our insights into politics, macroeconomics, industry trends, business operations, understanding of human nature, and even self-awareness into measures of gain or loss.
Therefore, when we have accumulated more and more wisdom and more mature perspectives, investment has become a good choice for our last career.
3. The key to financial management is that you must have money and you must be talented.
All financial management skills and methods will eventually be focused on "money". If you don't even have "money", how can you talk about "management"? Therefore, the key to financial management is that you must have money and you must be talented.
Most of us are struggling on the road of primitive accumulation, that is, you must first have the first pot of gold. As for how much money it is, it depends on your personal situation and the city where you live.
For many 8090s, even if they graduate from college and work hard for four or five years, and have a first pot of gold of about 200,000, they are often prepared for the down payment of a car house. If this is the case, the road to financial freedom through financial management will be aborted. Although buying a house is relatively an investment, you are tied to the house. Just like a kite, you can only fly freely within a limited range. When the kite flyer is tired, you have to go back obediently.
The first pot of gold that can really be retained and managed is often the struggling people in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. Because the housing prices are too high and they cannot afford it, they simply do not consider the down payment, so financial management is crucial for them.
For those of us on the road to primitive accumulation, we can say less about financial management and more about accumulation, accumulating experience, accumulating knowledge, and accumulating abilities.
If you want to open a lock, your focus is not on the lock, but on finding the key. Experience, knowledge, and ability are the integrated keys to money. Focus on growth and investment and learning, and financial managers will naturally open up for you.
When it comes to money, in addition to increasing income, it is also important to reduce expenditure. Reading a financial management book after your hard work is not as practical as not buying an Apple
4. Regarding the flow of money
Before we start managing money, we need to understand the laws of money.
There are two distribution patterns of things in this world:
