Let me share with you readers my views on high technology. After the light bulb was invented, many companies rushed to develop light bulb+, just like many companies later launched Internet+. The companies that were the first to use light bulbs gained a short-term competitive advantage. Perhaps their stock prices rose briefly, but when light bulbs became popular, they were lost to everyone else. The same is true for Internet+. The effects of companies using new technologies are short-lived, not to mention that many industries cannot be + at all. For example, second-hand house sales, it is difficult for the Internet to be added to this industry today. As an ordinary family without much wealthy capital, investing in light bulb R&D companies or Internet companies was risky behavior at the time, because 99% of high-tech companies would die and only 1% would survive. Not to mention, Canada's Nortel Company was once a leader in the Internet industry, but eventually died in this industry.
Conclusion:
Investment is a method of using excess cash on hand to purchase assets with tolerable risks, so that current cash and future cash flows can be exchanged across time periods. The purpose is to balance lifetime income. In the process, use leverage to obtain good debt, the kind of debt that allows others to help you repay the debt. You must also let others help you reduce debt day and night. At the same time, let assets become friends of time and continue to increase in value. In this way, your owner's equity will become larger and larger. Finally, in the absence of active income, the passive income generated by owner's equity can be used for consumption.
Let’s do a test. Readers who can understand the above paragraph in one go are quasi-rich dads who already have financial intelligence. Just keep repeating what they are already doing. Those who can’t read are still poor dads and need tutoring.
The financial and business knowledge that poor Chinese dads need to learn is divided into three categories: 1. Economic principles, understanding the relationship between limited ability and unlimited demand, as well as the relationship between effective demand, supply and price; 2. Financial foundation, understanding that the essence of modern finance is intertemporal value exchange; 3. Financial accounting foundation, bearing in mind the wealth identity "Assets equal liabilities plus owners' equity". Among the 130 articles I have written, the above three aspects have been broken into pieces. If you read them over and over again, you will definitely gain something. The most systematic video explanation can be found on YouTube, "We are forced to invest in order to balance our lifetime income".
