Recommend "Money: 7 Steps to Create Lifetime Income" this financial management book, supported by industry experts, with real cases as evidence, so that after reading this book, you will become the first person at home to invest in financial management.
The core of this book, the context of this book, is the simple 7-step investment method.
Step 1: Save more
To make money, you must first have money; to invest, you must first have capital.
Saving most of the income will naturally reduce consumer spending, thereby reducing enjoyment and even adding to the pain. So, how can you save more money and suffer less?
Nobel laureate economist Richard Taylor proposed a way: promise to save more tomorrow. What does that mean?
When you earn 5,000 yuan a month, it is good to save 1,000 yuan per month. And when you earn 15,000 yuan a month, you can't just save 1,000 yuan per month, but you have to save 5,000 or even 10,000 yuan. The core of "saving more tomorrow" is to raise the savings rate as income increases.
Step 2: Learn more
When buying something in a certain treasure, many people like to sort by sales volume and chase the sales champion. Buying funds also likes to sort by performance and chase performance champions.
However, last year's sales champion products, usually this year is not the champion can also be ranked in the top ten. Last year's top performing fund is likely to fall to the bottom this year.
Interlacing is like a mountain, which line to enter, you must understand the rules of that line. Consider institutional investors when their personal ability is really limited, even if the return is not as expected, but it can ensure the stability and security of wealth.
Step 3: Make plans
Before we go out, we must look at the map and determine the approximate route; we must also determine the goal of doing business and choose a good promotion path. The same is true for investment and financial management, first of all, set financial goals.
How much do you need to spend to live a better life? How much income do you want to earn? What is the annual rate of return of investment and wealth management? Only by clarifying the specific numbers will there be the power to execute.
If the goal of financial freedom is too far away, it may be better to divide it into several stages and gradually approach.
Step 4: Configure
Experts in different industry sectors believe that asset allocation is the most important factor in determining the long-term performance of investments.
The first is a safe/secure bucket
Only do the principal safety, fixed income investment, the goal of investment is to seek stability, defense.
The second is the risk/growth bucket
You can do stock investment, real estate investment, etc., and the goal of investment is to pursue higher income growth.
The third is the dream bucket
From now on, take out a small amount of money that you can afford to chase your dreams, and don't wait for more money to go.
The specific allocation ratio varies from person to person, and develops with changes in personal circumstances, and it is necessary to keep pace with the times and adjust in time.
Step 5: Stabilize income
Just climbing the mountain is not a mountaineering hero, and it is a mountaineering hero who can go up and down the mountain.
So, it's not enough to earn more, you need to turn these assets into long-term stable income in the future, that is, to develop a lifetime income plan.
Never forget that the investment is yourself. How much do you invest in yourself each year?
Step 6: Learn the method
Each of the industry domain experts in the book has a different approach to investing, but at least 4 things in common:
First, don't lose money
Defense is 10 times more important than offense, and if you lose 50 percent, you need to earn back 100 percent to get your money back, and you have to lose something you can never earn back — time.
Second, take small risks and make big money
Paul Tudor Jones — A hedge fund manager who has achieved more than 100% returns for five consecutive years will only invest in the chance that you could make $5 from a $1 risk.
Third, forecasting and dispersing
Look for risk-reward asymmetric investment opportunities in the best forecasts, then diversify your investments, prepare in advance, and prevent failure.
Fourth, never stop
Learning does not stop, making money does not stop, growth and progress do not stop, giving does not stop.
Step Seven: Great Wealth
For humanity as a whole, the greatest wealth is not in the past but in the future. For individuals, the greatest wealth is not money, but passion. People do not live for money, but to live better and happier with money.
We all want more money, more wealth. But the greatest wealth is not to receive but to give, not material but passion.
There is no point in doing investment and financial management just for money, but using money to pursue your own freedom and dreams, helping others survive, get food and clothing, and feel happy, this is the greatest meaning of life.