Wilde said:
When I was younger, I thought money was the most important thing in the world, but now that I'm older, I know that it is.
When people reach middle age, there are old and young, and having money is a person's greatest confidence and a family's greatest sense of security.
But many people save money, but it becomes less and less, and they forget where to spend it?
Whenever you want to use the family ledger to keep accounts, but only three minutes of heat?
Want to invest and manage your finances, but don't know how to manage your assets accurately?
If you also have such a problem, you may wish to read this book "How to Manage Every Penny Effectively" together.
The authors of this book, Ryusuke Koyama and Masaya Yamada, are well-known financial experts in Japan.
In their view, the flow of funds in a family is actually following certain accounting rules.
In the book, the author combines a large number of real cases to perfectly integrate accounting concepts into daily life.
From the current daily expenses to the specific family investment methods, how to manage money well in life will guide you in all aspects while planning your wealth, in fact, it is also sorting out your family life.
A family can only have the greatest risk resilience if it is financially comfortable.
When people reach middle age, everyone's decency is given by money, and the amount of savings is directly linked to the quality of life of the family.
But I've seen a lot of families who don't seem to buy anything at all, but by the time they realize it's already gone.
The root cause is that you have not developed the habit of saving money regularly.
My friend bought a new car, and in order to save face, he had to change it, and in order to improve the quality of life, he traveled around, ate and drank......
Life seems to be glamorous, but the loss of money is gradually uncontrollable.
It wasn't until the crisis came, an illness, an accident, that I fully realized Munger's words:
The importance of saving money is not how happy you are when you have money, but how embarrassing you are when you don't.
When people reach middle age, those who save money and those who don't save money live a different life.
If you don't want to one day in the future, because you can't afford to move forward and can't even protect your relatives, you must do it to open up sources and reduce expenditure.
"How to Manage Every Penny Effectively" offers three tips for saving money:
1. Keep a record of your spending
In fact, the biggest impact on saving money is modern electronic payment, spending money without any sensory stimulation, and only at the end of the month do you know that the budget is exceeded.
The best way to deal with this is to keep the consumption receipts, and only when you know what the money has become, can you realize your consumption behavior and improve your awareness of saving.
2. Open a savings account exclusively
If the money is put in a pool, it will be accidentally spent in the end, so if you want to save money, you can only stop at "thinking" and fall into action.
Only by numerically distinguishing money that belongs to two functions, a daily expense account and a savings account, can you really save money.
3. Keep track of the loan balance
In real life, every family is more or less burdened with a certain amount of loans, car loans, housing loans, and so on.
If you only focus on how much you have to pay each month, you will inevitably be depressed.
But if you record changes in the number of loan balances, and see that you owe less money little by little, the more you look at it, the more excited you will be, and the more you look at it, the more you want to work hard and cut back on food and clothing.
For the more cautious and cautious people, the more effective this rule is, and finally achieve the effect of saving money.
Some time ago, I saw a news.
A young couple in Shanghai has saved 3 million yuan in the past ten years.
They envisioned that according to the annual income of 800,000 yuan per year, plus the existing savings in hand, they planned to replace a school district house with a down payment of 2 million yuan and a total price of 8 million yuan.
But unexpectedly, not long after the house was bought, the husband's company launched a layoff plan, and then the wife's company also announced business difficulties.
In the end, the husband and wife had to sell the house at a loss and stop the loss in time.
This incident tells us that in a life full of uncertainty, we should never randomly participate in venture capital that is beyond our ability or knowledge.
Try to preserve your ability to resist risks, so as not to be the first to be photographed on the beach when the wind and waves of life hit.
"How to Manage Every Penny Effectively" introduces three rules about investing:
1. The rule of zero residual value
In accounting rules, tangible assets are gradually reduced to zero by default due to wear and tear, and this idea also applies to household finances.
Whether it is the car, computer and other assets we buy, it starts to depreciate from the moment you buy it, for example, a new car becomes a used car the moment you buy it.
Keeping this rule in mind, when we buy something, we will carefully consider whether it is necessary to buy something, and reduce unnecessary purchases of fixed assets.
2. The principle of preferential repayment
If you still have outstanding loans, prioritizing loan repayment is the wisest and most practical "investment" in the event of an economic downturn.
If you repay a portion more, you will have less interest on the remainder, and if you repay one cent less on the loan, you will earn one point.
A real reduction in loan balances will be, in a sense, greater than any one investment.
3. The Law of Capital Preservation
Is there a low-risk, high-return investment in the world? Yes, but that's only accessible to a very small number of people.
For the average person, when you know a good investment, it already means that its return has fallen to a level comparable to the risk.
Therefore, try to invest cautiously, the main goal at this stage is to keep the book and not toss blindly.
Many people have thought when they are young that as long as they work hard, have a stable job, and do not have large failed investments, their lives will get better and better.
It wasn't until people reached middle age that they found that the pressure of life was getting bigger and bigger, and the burden on their bodies was getting heavier and heavier, but their income had reached a bottleneck.
This is because no one can guarantee that their income will go up all the time, or stay the same.
So how can you accumulate enough wealth to meet the needs of yourself and your family?
In addition to saving money while you are in your youth, the best way is to learn how to manage your money.
Warren Buffett said:
How much wealth you can accumulate in your life does not depend on how much money you can make, but on how you invest and manage your finances.
Money is better for people than people for money, understand that money works for you, not you work for money.
Money is such a thing, if you don't take it seriously, it won't take you seriously.
So, instead of complaining about the unfairness of life, it is better to change your attitude towards life and try to learn some financial management.
"How to Manage Every Penny Effectively" shares three tips for building wealth:
1. Prioritize your money
Everyone wants to make a lot of money and make quick money, but not everyone has the luck to get rich overnight, even if they make money by luck, they often lose money due to lack of strength in the end.
The best way is to continue to increase oneself, whether it is to learn new skills, or to increase experience and experience, and take the initiative to do something that is conducive to long-term development, so that there will be more choices in life.
2. Master the "compound interest thinking"
Someone has made a calculation: if a family takes out 70,000 yuan a year and then invests it according to a stable rate of return of 7%, then after 70 years, his assets will be 113 million.
This is the power of compound interest, which is what we call "rolling interest".
Low interest rates also indicate low risk, but after a decade or decades of rollover, it will also bring you huge returns.
3. Carry out asset allocation
If you are lucky enough to save some savings, then a reasonable allocation of household assets can also effectively help you increase some "certainty".
For example, the assets used for investment only account for one-third at most, and then one-third is used to purchase principal-protected wealth management products such as bonds, and the last one-third is deposited in the bank as daily funds.
Many people say that the book "How to Manage Every Penny Effectively" is obscure because it looks too much like a business finance theory, and people who are not sensitive to numbers fall asleep in minutes.
But in fact, as long as you read this book patiently, you will find that it is still worth trying to talk about family financial management from the perspective of accounting.
Seligman, the "father of positive psychology", once said:
Happiness is not a result, but an ability, and the most lasting happiness is when you face everything, you will have a feeling of "I can".
Although the success of life cannot be measured by money, there are many meaningful and valuable things in this world.
But in a life full of uncertainty, the last dignity of adults is given by money.
Having money in your pocket can always make people feel more secure and confident, no matter what accident happens, you can have the confidence and confidence of "I can".