The Logic of Wealth

Wealth is what most people desire and pursue, and it is also closely related to everyone's life. But most people lack a basic, systematic and correct understanding of wealth. Some people hope that the stock market will get rich overnight and eventually lose everything; Some people seek ill-gotten gains through the legal gray area and eventually go to jail; Some people complain that the system is unfair and hate the rich.

It is our education system that dilutes or even distorts the essence of "money" and "wealth", resulting in the phenomenon of quick success and instant benefit and class opposition in today's society. What is wealth and what is the logic of wealth? Xu Jianming's book Choosing to Get Rich can give you many answers. This book is not eager to instill the method of how to manage money, but analyzes the essence through phenomena layer by layer, and answers the law of wealth transparently, essentially and systematically.

This is a highly recommended book to improve financial quotient. The following are reading notes:

Money. That is money and money. Money itself is worthless, it represents what can be bought behind it. Therefore, the essence of money is proof of creditor's rights.

Assets. The only meaning of assets is that they can bring benefits, and an asset that does not make money is meaningless. But assets and money can be transformed into each other. You can buy an asset with money. For example, if you buy an enterprise with 6,543.8+0,000 yuan, you will give up the claim right of 6,543.8+0,000 yuan and gain the future income right of this asset.

Wealth. The broad concept of wealth is defined as any tangible or intangible urban area that can bring benefits to its owners. Money is wealth, assets are wealth, and a person's knowledge, ability, life experience and healthy body are also wealth.

Capital. There is a subtle difference between capital and assets. Of course, assets are capital. In addition, the money to buy assets also belongs to capital, and can even be transformed into the wealth of assets, such as a person's business ability, which is also capital. All the elements that make up an asset need capital. Money is capital, patents are capital, technology is capital and management experience is capital. The biggest or even the only essence of capital is profit-seeking.

2. 1 ? The law of wealth generation and distribution

Before understanding the generation and distribution of wealth, we must first understand an important concept-factors of production.

Factors of production: various social resources needed for social management and production activities. Modern economics believes that the factors of production mainly include: labor, capital, land, entrepreneurship and science and technology. Broadly speaking, the social public service system is also a basic factor of production.

Wealth generation: the process of human production is the process of wealth creation. The production process is not only as simple as labor, but also requires the interaction of capital, land, entrepreneurship and social services to create wealth.

Wealth distribution: wealth created by production should be distributed among production factors. The exchange of production factors in the market forms the price system of production factors, and the distribution of wealth is ultimately determined by the price formed by the market.

For example, a female worker produces a dress and creates wealth for society. Suppose it is 100 yuan, does this 100 yuan belong to this female employee? Obviously not. The production of clothes requires cotton, thread, assembly line and other raw materials and equipment, which are all costs. What is deducted is the value created by the production of this dress. In the production of clothes in the factory, rent, property fees, utilities and so on need to be deducted. And advertising and marketing expenses. Factories operate in a peaceful business environment and also need to pay taxes for the government. The investors who set up this company are not philanthropists, but also want to make money. In the end, clothes can reach consumers, as well as sales personnel, distribution personnel, and even cleaning personnel. How much is left after the final distribution to the female workers?

In the distribution of wealth, labor income is labor income and capital investment income is capital income.

Labor income: also known as time income and activity income. Labor income needs continuous investment, and once it is not invested, there will be no income. Moreover, husband income is often measured by working time, which is the so-called time income.

Capital income: also known as property income, passive income and value income. The income of value-based labor depends on the degree to which the value created by this kind of labor is recognized by others, and it will bring you a steady stream of cash flow after you stop working.

2.2 ? The basic operation law of wealth

2.2. 1? A person's wealth is only his net contribution to society.

A person's reward is to contribute to society. The greater the contribution, the more rewards. And a person's consumption is the demand for society. Get wealth by contributing to society, and then use this wealth to consume and ask for it from society. The difference between contribution and claim is the net contribution to society, that is, the wealth in hand, and the right to claim from society is reserved. The premise is that the return given by society to a person can truly reflect this person's contribution to society, which is an ideal conclusion, but the essential feature of wealth.

2.2.2 ? If something is rare, its price is high-the rarer the better.

Since the final judge of wealth distribution is the market, the only way to get a bigger cake in the market is to let yourself have the indispensable rare elements in wealth, that is, things are rare and expensive. During the period of reform and opening up, because China was in an era of capital shortage and labor surplus, people with capital earned much more money than those with labor. In the future, the driving force of China's economy will mainly rely on entrepreneurship and technology, or, in fashionable terms, entrepreneurial innovation.

law of universal gravitation

Wealth is only willing to be with those who treat it correctly. The rich have finance, not because they grab it, but because wealth is attracted to them. The poor lack wealth not because they are deprived by others, but because of their attitude towards wealth.

Managing money is like asking for directions. You must know the starting point and the ending point to find the best path. The end point is the goal of life, the starting point is the current financial situation, and the way to find it is the financial management method to achieve the goal. Therefore, there is no unified method of financial management, only suitable methods, and what method is most suitable depends on the starting point and end point of financial managers.

The so-called financial freedom is to ensure that you and your family can live an ideal life by establishing a lifelong cash flow channel. Therefore, financial freedom cannot be achieved only by temporary income.

How to achieve financial freedom, there are three cash flow channels:

1. Management industry. It is characterized by high risk and high return, which can continuously expand its scale and requires a lot of time and money, especially in the early stage. Suitable for comprehensive talents and people with high emotional intelligence.

2. Create intellectual property rights. Its characteristics are low start-up cost, simple and cheap production, economical carrying, high gross profit margin and legal protection. And it is usually in line with the creator's expertise and hobbies. Writers, composers and software developers get royalties, inventors get patent income, knowledge shares share dividends, transfer franchise rights and so on. Suitable for knowledge-based talents and people with high IQ.

3. Establish a portfolio. The core is to have capital first and everyone can do it. The key to success lies in long-term persistence. Only through long-term compound interest income can the huge growth of investment income be realized. This cash flow channel is the most stable and lasting, and it is the cornerstone of realizing financial freedom. Suitable for sensory talents and people with high financial quotient.

Usually, industrial equity investment is the best way to completely change a person's economic level, while stocks, bonds, gold, p2p and other investments. Those who are in contact at ordinary times can only play a icing on the cake for those who already have a considerable wealth base, and will not fundamentally change a person's economic level. As long as you think about it, most rich people get rich through industrial equity investment.

According to statistics, five years later-not too long, only five years later, 90% of those lottery winners returned to winning life. Whether a person is poor or rich in the end depends not on so-called opportunities, luck, or illegal means such as corruption, but on choices. Choose the lifestyle of the rich, choose the value system of the rich, and choose the attitude of the rich towards wealth, and you will become a rich man.

Let's first review the basic concept of wealth: the wealth a person owns is only his net contribution to society.

So what is the lifestyle of the rich?

First, their lives are more self-disciplined. The basic concept of wealth tells us that being rich means giving more and taking less. A person who does not know how to control his own desires, a person who lacks self-discipline in life, will lose control of the demands of society, and no amount of wealth will be squandered.

Second: they have to take more risks. The benefits are in direct proportion to the risks. To become rich, you must take more risks than ordinary people. Taking risks usually means bearing more hardships in life.

Third: they have to bear greater responsibilities. The more resources it occupies, the greater its responsibility.

Being rich doesn't mean being happier, happier and more glorious, but it means paying more, bearing more and bearing more.

So, how to become rich?

The first step is determination. Make sure you really want to be a rich man.

The second step is accumulation. If you want to be rich, you always pay more than you get from society.

The third step is to enlarge the ability. Everyone can do it through accumulation, but he will never become rich. If you want to become rich, you must try to enlarge your ability, create value ten times, one hundred times and one thousand times higher than others, and gain wealth ten times, one hundred times and one thousand times.

How to enlarge the ability, which requires the establishment of a lever system. Just as Archimedes wanted to tilt the earth, he needed strength, fulcrum and lever. Strength is your ability to contribute to society, fulcrum is to find the profit model of your products or benefits, and leverage is a system that can amplify your products and services. In the network economy, the network is often used as a lever to make your products or services face thousands of audiences.

Matsuura Yataro said: Take money as our friend. Since we are friends, it is a prerequisite to establish a clear understanding. The next step is to find a way to establish close contact with money and want it to stay with you. Again, money only likes people who treat him correctly. Take some time to test your attitude towards money and think about how to use your advantages and resources to establish a cash flow channel.