Article Directory
Preface
Always face money issues, learn financial management knowledge, and constantly improve your financial quotient.
All arrangements involving money are financial management. Establish correct thinking about making money.
Don't remember not to cast randomly! Don't blindly talk to so-called experts!
1. Thinking
Get rid of the moonlight formula (change of thinking): income-surplus (mandatory investment) = expenditure.
First surplus and then consume, first take out a fixed fee as an investment, and then consume the rest, instead of consuming first and then using the remaining to invest.
Good debt: For example, when you buy a house from a bank loan, you have debts, but the rent can cover the monthly payment and property expenses. At this time, this debt is a good debt. Don't rush to pay it off. It can take as long as you can.
Good expenses: Good expenses can bring in more income, such as investing in your own brain.
If you want to be rich, you must distinguish between unnecessary expenses and try to solve unnecessary expenses and bad debts! ! !
Control your desires.
So if you want to buy a house, you can install it for as many years as you can. The previous article introduced inflation. Compared with inflation, the bank's interest rate saves a lot of money in installments than in one installment.
2. Assets
The connotation of assets is: cash flow . According to different cash flows, assets are divided into three types.
Money-generating assets: things that can bring continuous net cash inflows. In other words, what the public said is income after bedtime, making money and assets to support others. Let us become rich and
consume money assets: things that can bring continuous net cash outflows are equivalent to spending after bedtime, consuming money, assets and people. Let us impoverish
other assets: something that generates zero net cash flow. Let us become rich or poor
Take the house as an illustration:
- If there is a house, there is no loan and the rent is obtained by renting out, which brings cash flow, it is a money-generating asset, or there is a loan, but the rent can cover the monthly payment and business expenses and have a balance.
- If it is a house with a down payment of 30% and lives by oneself, there is no rental income, and monthly payment and business expenses are paid every month, then it is a money-consuming asset.
- If the house’s rent, monthly payment and business expenses are just the same, then it’s another asset
Take the car as an illustration:
- Private cars are for self-use, and every year there are expenses such as insurance, maintenance, and parking fees. Private cars continue to bring net cash outflows, so private cars are money-consuming assets.
- If this car is running in an amateur, can the income cover the daily use of the car and still have a balance? , Then it still consumes money and assets, because driving a private car to make money requires investment of time. This is labor income, not the net cash inflow brought by the car itself. If it is not pulled, there is no income, so this is still a money-consuming asset.
- Rent out the car, and then remove the various expenses to have a balance. This is a money-making asset, but since it is a private car, it is generally not rented out, so a private car can be regarded as a money-consuming asset.
3. Statement of Financial Freedom
Implementation steps:
- Wage balance
- Use the balance to exchange money for assets
- Money-producing assets generate non-wage income
- Non-salary income helps us achieve financial freedom
When money assets are generated, the non-wage income generated covers the total daily expenditure, then financial freedom is realized. Here, a concept of financial freedom is designed.
Calculation formula: Annual non-salary income (annual investment income)/annual living expenses>= 1
Generally equal to 1 is the most basic degree of freedom. The larger the number, the higher the degree of freedom.
If money-generating assets account for more than 80% of total assets, and good expenditures account for more than 80% of total expenditures, then you can count as a rich person.
You must learn to invest in yourself and make every investment a good expense.
to sum up
Wealth is managed, and if there is no money, we need financial management! Financial freedom is the inevitable result of scientific financial management. The busier you are at work, the more you need financial freedom. If you want to be rich, you need to walk on two legs. You cannot walk on one leg with salary alone. And if there is an accident in your life, you should go to the ICU. Enter a state of poverty, so in order to prevent total accidents in life and improve the ability to resist danger, you must walk on two legs.