The poor are poor, the rich are rich

Chapter 96 4 Proficiency in Investment Cannot Ignore the Rules

Chapter 204 Proficient Investment Cannot Ignore the Rules

An excellent investor should not only be familiar with his own investment field, but also be familiar with the rules of this investment field.Mastering the rules of the investment game is the key to investing.The gist of the investment rules is how you manage money and become the master of money in the face of a secretive market. Its significance is not only in making money with money, but more importantly, in maximizing profits through your investment behavior. This is the true meaning of investment!And the premise of all this is to master the rules of the investment game.

Specifically, you need to master the following investment rules:
1. Basic financial knowledge

Many excellent people know how to use their knowledge and ability to make money, but they don't know how to manage the money they earn and use it to make money. This is mainly because they lack basic financial knowledge.Therefore, the first step in investing is to master basic financial knowledge, learn to manage money, know the time value of money, understand simple financial statements, and learn the basic calculation methods of investment costs and returns.Only by learning these basic financial knowledge can we use assets flexibly, allocate various investment quotas, and make our wealth grow faster.

2. Investment knowledge
In addition to financial knowledge, we also need to master the basics of investment.Modern society provides a variety of investment channels: bank deposits, insurance, stocks, bonds, gold, foreign exchange, futures, options, real estate, artwork, etc.If you want to gain something in the investment market, you must be familiar with various investment tools.Although the income of deposits is low, it is very safe; the income of stocks is high, but the risk is greater.Various investment vehicles have their own risk and return characteristics.After familiarizing yourself with the basic investment tools, you need to combine your own situation to master investment skills, learn investment strategies, collect and analyze investment information, and only by accumulating more can you truly learn how to invest.Not only do you have to watch more and learn more, but you can also participate in various investment classes and lectures, read newspapers and magazines, and acquire knowledge through TV, the Internet and other media.

3. Asset and liability management

To invest, you must first figure out how much money you have available for investment.Similar to the financial management of a business, the first thing to do is to list your personal or family balance sheet: how much are your assets?How are assets distributed?Is the allocation of assets reasonable?How much did you borrow?Long term or short term?Do you have a credit card?Is the credit overdrawn?How are you going to pay back the money?Has anyone lent you money and can you get it back?You may never have thought about these questions, but if you want to have a good investment ability, you must pay attention to them now.

4. Risk management

There are unpredictable things in the sky, and people have misfortunes and blessings. If you do not manage and prevent risks well, when accidents happen, you may get yourself into trouble.A person not only needs to know his ability to bear risks, that is, how much risk he can bear, but also his own risk attitude, that is, whether he is willing to take large risks, which will change with people's age and other circumstances.Young people may be willing to take risks but have little wealth to do so, while older people have the means to take risks but are mentally unwilling to take them.A person should optimize his own risk and return combination according to his own assets and liabilities, age, family burden status, occupational characteristics, etc., and this optimal combination is also adjusted at any time according to the actual situation.

(End of this chapter)