Financial blogger: The era when it was difficult to raise children has passed, and if you don't have children, you will lose

At the 2023 "Financial Thinker of the Year" ceremony of Yicai Yicai, Wen Yifei, a young financial thinker, said that it is very difficult for young people to get rich now, and our society has pursued high-speed development from the past to now taking into account fairness, so the story of getting rich is rare. However, there are shortcuts in life. Let's talk about the three opportunities we see now, with a relatively high probability.

At present, economic growth has entered a period of high quality, and the biggest opportunities that young people can seize include the following aspects: first, pay attention to the "urban half-life" opportunities, that is, pay attention to those cities that were once brilliant but are not so popular now, these cities may have hidden opportunities, second, pay attention to structural opportunities, such as the opportunity for the stock market to match the tone of national development, and the capital opportunities brought by the market, and third, pay attention to the fertility opportunities brought about by the declining birthrate, that is, the benefits of declining birthrate under the demographic change.

The third structural opportunity is to have a baby now, which is equivalent to buying a house 20 years ago. With the advancement of globalization and industrialization, the decline in fertility is an inevitable event in the world. The fertility rate in developed countries as a whole has long fallen below 1. On the other hand, when the fertility boom recedes, it may be easier for our children born in the next few years and their parents to raise children in the future. Therefore, the third structural opportunity under our demographic change is the fertility opportunity brought about by the declining birthrate. In this day and age, if you don't have children, you're at a loss.

When the fertility boom recedes, it may be easier for children and parents born in the next few years to raise children in the future. The next generation of children will hardly have to worry about having nowhere to live, and the number of people born last year and the year before will not grow again.

According to the Ministry of Housing and Urban-Rural Development, there are 600 million urban and rural housing buildings and more than 800,000 municipal facilities in China. Compared with the 1.4 billion people of Chinese, it is definitely no problem to live in the future.

He said that in the future, housing and education resources will be relatively abundant, and the era of raising children is expensive and difficult has passed.

The following is the full text:

Friends on site, friends online, hello everyone. I'm Wen Yifei.

Each era has opportunities in each era, and the post-60s, post-70s, and post-80s generations have caught up with the waves of reform and opening up, globalization, real estate and the Internet. If you also participate in two or three waves, for example, I rented a house in Hangzhou, the landlord sold the house last month, she joined Alibaba 20 years ago, Ali went public to make money, and sold the house in Hangzhou, the house I bought for seven or eight million at the beginning, and now it is sold for 30 million, so I need to go out again to find a house to live in. However, this is the great opportunity of the times, as long as you can stick a little, there is considerable wealth.

Now that we have entered a period of high quality in economic growth, what is the biggest opportunity that young people can seize next?

First of all, I think it's very difficult to get rich now, our society has gone from pursuing high-speed development to taking into account fairness now, so stories of getting rich are rare. However, there are shortcuts in life. Let's talk about the three opportunities we see now, with a relatively high probability.

First, in the past, we encouraged everyone to go to new cities with high growth, such as Shenzhen 30 years ago and Hangzhou 10 years ago. But now, maybe the other way around, can young people start to think about going to low-growth old cities, especially old big cities, this first opportunity, is called the opportunity of urban half-life, the so-called semi-recession cities refer to those cities that were once brilliant, but now not so popular, they seem to be old and old, there is no high rate of growth, but there are hidden opportunities in this.

From 2000 to 2020, our country's urbanization rate increased from more than 30% to more than 60%. Nearly 400 million people have moved from rural to urban areas, the equivalent of the entire United States. And the urban construction in recent years has been ahead of the curve at this speed.

But not every city can sustain this growth. Don't think the name Half-Life is unpleasant, as if the city is finished.

Let me tell you a few data, the admission rate of students who will take the college entrance examination in Northeast China in 2023 is the admission rate, not the undergraduate admission rate, Heilongjiang is 24%, and Liaoning has 30%. Guangdong, Zhejiang, the most economically developed province, has a rate of about 15 percent, which is only half that of Liaoning, and the competition is too fierce. Parents in these developed areas may need millions to buy a school district house, and they have to think of ways to cultivate excellence, otherwise they may not be able to go to high school, let alone the college entrance examination. In the Northeast, the social infrastructure was completed very early, and young people are going out, so there will be fewer people enjoying these basic services, and the cost performance will come out. Another example is the pension, the aging of the Northeast is relatively early, and the new industry is still developing relatively little, but the future of the Northeast pension service should be able to do a good job. Because this is a large part of its financial source, the pension in the Northeast depends on the central subsidy. In 2022, the three eastern provinces will receive 180 billion pension transfers, and 86% of the national pension transfers will go to the three eastern provinces, so the Northeast must find ways to retain the elderly, because once these elderly people go to the south, it means that these subsidies will follow to the south. 180 billion pension, that is, 180 billion consumption, counting the flow of money, can bring several times the GDP, which is too critical for the Northeast. Therefore, pension is an industry that must be done well, and the money must stay in the pocket. If you think that the Northeast is too cold, there are many similar cities, and now the population is flowing out, especially the places where young people are outflowing, many cities themselves are not bad, transportation, education, medical care, are all passable, you say that the local schools, hospitals, will not be closed immediately for a while, your generation may be able to enjoy.

If you want to talk about life, now in the business districts of big cities and small cities, the gap between the brands bought in them is very small, they are all chain stores, and there should be everything. But the cost of living is so much lower. Like relatively large, such as Xi'an, Nanchang, Tianjin, maybe their future economic growth rate, the opportunity to make a fortune, not as good as Shenzhen, not as good as Shanghai, but in medical education is fully qualified. For example, some people think that Tianjin is developing slowly and Shenzhen is developing fast, but you know that Tianjin's medical care is second only to Beijing, Shanghai and Guangzhou, with 33 tertiary hospitals, while Shenzhen has only 26, Tianjin has 4 985 and 211 universities, and Shenzhen has no except for the Shenzhen campus of Harbin Institute of Technology. Many fast-growing big cities, welcome young people, but do not welcome the elderly, social services are bound to housing prices, the price is extremely high, according to the data in October, Shenzhen to buy a house on the car, is just needed for the house, the unit price is more than 50,000, and Tianjin only needs more than 10,000. You say that these half-life cities can't find jobs, but isn't it really the same in the first-tier cities? In the past, the first-tier cities could still have a dream of making a fortune, but now the salary is a few thousand yuan higher, is it really cost-effective?

Two days ago, I saw a very interesting argument by Professor Gao Shanwen, who said that recently, counties, especially small and medium-sized cities, have been less affected by the economy and fluctuated less than large cities, because the so-called high-paying industries such as education and training, finance, and the Internet are all in first- and second-tier cities, but now these industries have received stricter supervision and better optimization, so the income is not as high as before. On the flip side, many high-paying jobs in first-tier cities may not be as easy to find as they used to be

Therefore, we see that the four things that spend the most money in life are education, medical care, pension, and housing. It's not that Shenzhen and Hangzhou can't afford to live, Changsha and Nanchang are more cost-effective, and the old city is in decline on the surface, but in fact, it has fallen out of the opportunity of the times.

In places with a lot of outflow in the past decade, housing prices will fall, but life will be much less stressful. In fact, many people have already begun to act, in last year's population flow, the largest inflow is no longer Beijing, Shanghai, Guangzhou and Shenzhen, the top ten miles are seven cities in the central and western regions, namely Changsha, Hefei, Xi'an, Nanchang, Kunming, Wuhan, Zhengzhou. Go to these places, not the top cities, but probably the best cities for you.

In addition to the house, the most asked by my fans is the question of money. Everyone wants to know, what do you buy to make money? Will the stock market rise this year? When will it rise?

The second is what we call structural opportunities. It is the capital opportunity brought by the market. China's stock market is always a little bitter for people. There are various problems in the governance of listed companies, but every time the stock market reaches below 3,000 points, and then everyone makes up all kinds of jokes to express their emotions, when they ridicule, it is actually an opportunity for layout.

In fact, market-oriented capital is an important force in our market, but it may not be a decisive force. If you understand this matter, you will know that under the premise that there are no major changes in the economy, the safety of the stock market of more than 2,000 points is actually quite high. This kind of opportunity happens once or twice a year for the past two years, and it's not very common, so when it comes up, take some time to think about it.

The third structural opportunity, which I like to talk about the most, is also the issue we talked about last year, which is that having a child now is equivalent to buying a house 20 years ago. As I told you last year, the decline in fertility is an inevitable event in the world as globalization and industrialization progresses. The fertility rate in developed countries as a whole has long fallen below 1. On the other hand, when the fertility boom recedes, it may be easier for our children born in the next few years and their parents to raise children in the future. Therefore, the third structural opportunity under our demographic change is the fertility opportunity brought about by the declining birthrate. I guess people will say, "Oh, look at this man, he goes around and around, and finally he goes around to give birth to this thing." Although everyone may dislike it, I still have to remind everyone here that in this era, if you don't have children, you will lose.

Many people say that life is very tiring now, and it is difficult for people who have graduated from college to find high-paying jobs, and they do not want to have another child and let the next generation continue to suffer. As you know, in the 5th and 60s of the last century, when Japan was at its peak, it was about 2,700 hours a year, and office workers almost became work machines. Later, Japan's birth rate fell, falling from 3.3% in '49 to 1.3% in '66. And then all the way down to the present. But on the other hand, when these rare children grew up and entered the workforce, the working hours in Japan also decreased, and the bubble economy period basically stabilized at 2,100 hours, about 15 years. In recent years, it has been shortened from 2,100 to 1,644 hours. That's 39 percent lower than the peak, nearly 40 percent. There are also people who feel that the cost of raising children is too high, and that a lot of resources need to be poured into raising highly educated children. The average cost of raising a child to the age of 18 in Chinese families is 485,000 yuan, which is 6.9 times the per capita GDP, that is, a person can only raise a child without eating or drinking for nearly 7 years, which is almost the highest in the world.

Japan, the United States, Canada and other developed countries with low fertility rates are at most 3 or 4 times higher. It's hard to raise a child now, but it won't be hard all the time. This is already obvious in the general direction. In fact, the cost of food and clothing for Chinese children is not much, and there are only two parts that really cost the most money to raise the cost of parenting, one is education and the other is housing. Our country is a compulsory education, and the tuition fee does not cost much, and the so-called high cost of education is mixed with a lot of additional expenses. For example, the make-up Xi class, the Xi class, and the specialty class are a lot of money. When K12 was at its hottest, it could finance tens of billions of dollars every year. But education is the foundation of the people, and it has been popular but will not always be popular. Now that the double reduction has been implemented for several years, the financing of education and training is less than 2 billion this year, and interim measures for punishment of education and training have been issued in 23 years to further reduce the cost of children's Xi. Not only in education and training, but also in school. China has more than 3,000 universities, more than 90,000 high schools, 150,000 primary schools, and 290,000 kindergartens. The rate of decline in these educational institutions is certainly slower than the rate of reduction in children, and nearly 1/2 of the people will have access to higher education in the future. For example, if my own children's kindergarten is promoted from kindergarten to primary school after they graduate this year, the entire kindergarten student population will be halved. Therefore, in the future, the reduction that will begin in kindergarten will gradually be passed on to elementary, junior high and high school. Some parents now need to do their best to pay for their children's tuition fees, endlessly competing for school places, and this situation may become less and less common in the future. And housing, on the other hand, will only be more relaxed. I'm here to say that the next generation of children will hardly have to worry about not having a place to live. Because something else may change, but the population born last year, the population born the year before last, he can't grow anymore, he's already a fait accompli.

According to the Ministry of Housing and Urban-Rural Development, there are 600 million urban and rural housing buildings and more than 800,000 municipal facilities in China. The 600 million here is a building rather than a set, compared with the total population of 1.4 billion Chinese, it is definitely no problem to live in the future. Housing and education have been very certain, and there will be a lot of relative abundance in the future, which is a certain thing.

The total number of houses is also there, which is a fait accompli, and the total number of schools is also there, which is also a fait accompli. In other words, the days when children were expensive and difficult to raise children are over. Since the reform and opening up of our country for more than 40 years, the infrastructure and social services we now enjoy are the results of half a century of accumulation from generation to generation.

When it was designed, it was designed to meet the needs of 1.4 billion people, including food, clothing, housing and transportation, and some advanced planning to support the healthy growth of more than 20 million newborns every year at its peak. And with fewer children, the resources that can support these more than 20 million newborns will be condensed into eight or nine million children every year. We don't have to guess or deduce, but simply list these facts, and we know that the next generation will have more resources than they do now. But at the end of the day, the issue of raising children is not essentially a question of money. In modern society, people are always measuring, measuring costs, weighing pros and cons, and measuring benefits. Raising a child is not an investment, it is not a transaction, it is not that you raise him today, or that he will raise you tomorrow. People are social animals and have different social attributes, we are first other people's children, and then we have friends, teachers. When I have a child and become a parent, in the process of raising my child, I have an opportunity to experience the social attribute of parents, learn to take on more responsibilities, enjoy the joys and sorrows of the next generation, and experience a new life. This may be the hidden meaning of having a baby.

In the 21st century, having a child is actually the most cost-effective thing.

(This is the original draft of the speech of young financial thinkers at the 2023 "Financial Thinkers of the Year" ceremony of Yicai Yicai, and the content of this article only represents the author's own views)