Read the first book to understand investment and financial management

Chapter 5 Investment and financial management should establish a correct concept of financial management (2)
When many young white-collar workers who don't know what futures are are eager to try gold futures, they don't know that huge risks are coming to them.As far as gold itself is concerned, the lowest futures price in July 1999 was US$7 per ounce, and it has recently risen to more than US$253, which means that physical gold has increased by nearly 10 times in the past 9 years, and the annual rate of return is 4 % or so, but few people can buy gold at the lowest price and hold it all the way.

From an empirical point of view, as a non-interest-bearing commodity, long-term investment in gold cannot resist inflation risks, but now because it has risen sharply, people like to discuss its hedging function, and this is precisely the most dangerous way to invest in gold at present. aspect.As a precious metal, gold has little practical function other than being a decoration and currency reserve, so its price will be quite volatile.Historically, after the collapse of the Bretton Woods system (dollar-gold standard) in 1980, gold soared all the way to a high of $850 per ounce, and then fell all the way until 1999 before bottoming out and rebounding. It will be reversed at any time, and I don't know how many years gold will trap investors.

It can be seen that without knowing the inside story of investment, don't follow the trend blindly. We must find the road with few people. The place where everyone "gets together" may not be a good place; investment can't follow the trend blindly, you must Find an investment style that works for you.

If you want to become a master of financial management, you must overcome your herd mentality and not blindly follow the trend. Not only must you overcome the herd mentality when investing, but you must also overcome such "little problems" in daily consumption, so that your financial management ability can be reflected in your life all aspects of.

Your Investing Habits Are Worth Millions

Whether you will make money or not is actually controlled by your own investment habits.Many investors have spent their entire lives in the financial market without achieving anything. The first reason is that small money may be earned, but they are often eaten up by a large amount of "regrets and losses".

Larry?You must be familiar with the name Bird.He is one of the most outstanding basketball stars in history and a legend of the NBA generation.In fact, Larry is not the most talented basketball player, but he was able to lead the Boston Celtics to three championship podiums.

How did Larry do all this?As early as his teenage years, before Lali joined the NBA, he practiced five three-point shots every morning before going to school.Hard work paid off, and after years of practice, he finally succeeded and became one of the best three-point shooters in NBA history.

In real life, only a few people can realize the great effect of habit.In fact, a good habit may sometimes bring us unexpected surprises, and may even change the trajectory of our lives.

mark?Thiel's research results also confirm that the power of habit is amazing, and in the face of habit, rationality is often vulnerable.Some people always like to complain about their bad fate. In fact, instead of wasting time complaining about their bad fate, it is better to cultivate good habits with heart, because habits can change a person’s fate inadvertently, and habits can also change a company, an The fate of a nation and a country has quietly changed.

Investment is a habit. If a person can develop a good habit of investing, he will also change his own destiny.After a person learns to work hard to earn money and spend money with heart, he must develop good investment habits.This kind of habit can make the wealth we own increase in value while maintaining its value. It can enable us to obtain gains other than fixed income. It can not only add fun to our life, but also make our life more superior.

The world's investment masters are using their own experience to prove to us that investment success does not depend on investors' education, supernatural power or good luck.Success belongs to those investors who are pious, never give up and have good investment habits.There must be countless sweats behind the miraculous results. Only those who have mastered the exquisite investment philosophy and internalized the investment philosophy into their personal investment habits can truly achieve the unity of nature and man and reach the highest level of investment. In order to obtain unexpected gains.

Investors' desire to get rich is understandable, but if you lose your mind over it, you shouldn't.The original purpose of investment is to live a better life. If you deviate from this purpose and let investment disrupt your normal life, it should not be done.Therefore, it is particularly important for investors to develop a good habit of rational investment.

Habits determine success or failure, sow a habit and reap a destiny.Good habits can ensure the smooth progress of investment and financial management, reduce investment costs and mistakes, bring you a steady stream of wealth, and change the trajectory of your life.

Pay attention to financial knowledge and master financial skills

Although when it comes to financial management, people generally place high hopes on success.However, in real life, because everyone has their own financial management concepts and methods, the final "harvest" varies from good to bad.Because there are too many "crossroads" on the road of financial management, if there is no guidance and you do whatever you want, you will get twice the result with half the effort and lose more than you gain.

For example, in the face of dazzling investment channels, some people are often at a loss, and only know how to follow the crowd and follow the "big troop" to "do the same thing".It's all right if the painting is good, if the "odds" are quite high if the painting is not good, then it will be your own fault if you blame others.As everyone knows, from the very beginning, blindly following the trend in the selection of investment channels, focusing on high returns but ignoring high risks, has committed a financial taboo.

Different from the "losers" mentioned above, there are still some people who know how to manage money in life. It is to conduct a comprehensive analysis of their family property, specialties, and environment, and then design a suitable investment channel for themselves. A good return on wealth has been achieved.As the saying goes, you need to pay attention to skills in everything you do.Since financial management is no small matter, financial management should pay more attention to skills. Whether it is used well or not is directly related to the success or failure of financial management.The reason why those successful people get twice the result with half the effort is that they pay attention to the accumulation of financial management knowledge and listen to expert guidance.Because, if investors don't have a little financial knowledge, even if a good financial opportunity is in front of them, they still won't find it.

For example: If you don't know what a closed-end fund is and what a discount rate is, how can you seize the rare opportunity of a 26-year closed-end fund?Moreover, even if this opportunity comes again 10 times, if you don't know anything about fund knowledge, you will miss it again and again.Therefore, Buffett said well: "The best investment is learning, reading, summing up experience and lessons, enriching one's mind, increasing one's knowledge, and cultivating one's vision." It can be seen that successful investors like Buffett pay attention to Reading books on investment and financial management, if ordinary people don't pay attention to the accumulation of financial management knowledge, how can they do better than Buffett?

Therefore, financial management is no small matter.Whether it is learning skills or mastering knowledge; whether it is a failed financial management process or a successful financial management process, it is a life experience of "people looking for money".It’s what Buffett said again: “It’s better for money to find money than for people to find money.” As long as we establish a positive investment philosophy and know how to manage assets reasonably and effectively, I believe that we will finally be able to open the golden key to financial management and experience the real wealth of our own life.

Investment is not only a science, but also an art. Investment skills cannot be developed in a day or two. This requires the guidance of experience.If you are impatient, you can’t eat hot tofu. If you want to make profits in investment, you have to take your time. It is impossible to become fat in one bite.

Set up an investment plan and manage your money clearly

Forewarned is forearmed, without prejudging the waste.Financial management is no exception. There must be a clear plan before investing in financial management.Susan of Morgan Stanley Asset Management?Hershman said: "The biggest mistake people make is not having a direction and not knowing what to achieve." If there is no clear goal, one's emotions are likely to rise and fall with the rise and fall of the stock market every day. This kind of suffering is far from the original intention of financial management, but if you have financial goals, you can face market changes rationally.

Everyone has different goals, say you want to travel to Europe, and some family wants to buy a car, but these are just a vague idea.Which countries do you want to go to?How long are you going to travel?What kind of place do you live in? ...these are the questions.Different plans require different amounts of money.Therefore, you should convert your own or your family's wishes into a number, a clear and specific financial goal.

List your own or your family's wishes one by one, draw out some ideas that are impossible to realize, and list your feasible goals.

The goal must be time-sensitive, and there must be a standard that can be tested. For example, I want to buy an Audi A6 within two years. The timeliness of this goal is the time limit of two years. The test standard is of course the money earned Compare that to the sticker price of an Audi A6.

Another point is that the returns we get from investment and financial management are money, not the houses and cars we want. Therefore, it is not enough to have a definite goal. The next thing is to convert our goals into money.Before conversion, you must determine your own goals, and vague goals cannot be quantified.For example, if you want to buy a car, you need to specify your car. You need to consider factors such as what brand to buy, what performance you want, and fuel consumption. Your goal is converted into money, and the total amount is your goal.

Sometimes, it takes a long time to achieve the goal you set. At this time, the best way is to break the goal into several stages, set small goals, convert the small goals that can be completed in the near future, and make plans as soon as possible , Find the right financial management method to achieve it, as long as the small goals of each stage are achieved, then you will be closer to your overall goal step by step.

At the same time, the establishment of financial management goals must be compatible with the family's economic situation and risk tolerance in order to ensure the feasibility of the goals.Financial management activities can be carried out in an orderly manner only after the staged financial management goals are established.

With financial goals, it is also necessary to conduct asset assessments for individuals or families.The purpose of the evaluation is to know the income and assets of the family well, which is conducive to choosing the direction of financial management and determining the investment projects.

Financial management also needs to determine their own investment period.Financial goals can be divided into short-term, medium-term and long-term, so different financial goals will determine different investment periods, and different investment periods will determine different risk levels. Therefore, we must pay attention to these when evaluating assets .

Investment and financial management without a plan is equivalent to no financial management. A clear, specific and scientific plan is the navigation map of your wealth and life, guiding you to invest and manage money in an orderly manner, reduce blindness, avoid risks, and obtain expected returns.Making a good plan is equivalent to making a good start for financial management.

(End of this chapter)