Dear friends who are striving for financial freedom, good morning! I truly love those ordinary and routine days, because all wonderful things tend to happen quietly in such plain daily lives. Work and regular investment, one related to reality and the other to dreams, just like the road under our feet and the distant vision, these seemingly trivial details actually form the track of our ordinary people's growth and progress. We should understand that the essence of financial freedom is by no means getting rich overnight, but rather enabling passive income to steadily cover all kinds of living expenses. So, how can we achieve it? In fact, it all depends on two things. First, we must work earnestly. By working hard, we can earn a stable cash flow, which is the "ammunition depot" for our subsequent investments and is of utmost importance. Second, invest in index funds. Use our spare money for long - term regular investment to make money generate more money and continuously magnify the returns. As long as we keep repeating this cycle of the two, one day passive income will exceed active income. Then, how exactly should we do it? We can follow four steps and execute them in a cycle. Work hard. We need to find a career that can continuously bring stable income and steadily accumulate principal. At the same time, force ourselves to save at least 10% of our income to avoid over - consumption. Make regular investments. As soon as the monthly salary arrives, immediately take out a fixed proportion, say 5% - 10%, to invest in index funds regularly. When choosing, give priority to broad - based indexes such as the CSI 300 and the S&P 500. These can effectively diversify risks and are extremely worry - free and labor - saving. When facing market fluctuations, we must learn to ignore them. Market ups and downs are normal. When it rises, never chase the high price, and when it falls, never cut the loss. The key to regular investment lies in "discipline". The more it falls, the more we should continue to buy, so as to accumulate more shares at a low price. As we go along, we need to repeat the cycle. Upgrade our work by improving our skills or changing to a higher - paying job to increase the cash flow. Upgrade our investment. As the principal increases, gradually increase the proportion of regular investment (for example, from 10% to 20%). Keep cycling until one day, the investment income can fully cover our living expenses. There are three principles that we must adhere to. Only use spare money. Only invest the money that does not affect our lives and resolutely refuse to borrow money or use leverage. Protecting the principal is the bottom line, as losses will directly disrupt the entire plan. Keep it extremely simple. Do not study industries, do not predict the market, and do not operate frequently. Regular investment in index funds is the only thing we need to do, and leave the rest to time. Adopt a long - term perspective. Persist for at least 10 years or more to experience a complete bull - bear cycle. Compound interest takes time to take effect. With an annualized return of 8%, the money can multiply by 10 times in 30 years. Here are some key reminders. The lower the cost, the better. Choose index funds with a management fee of less than 0.5%. In the long run, this can earn 20% more returns. Mentality is more important than skills. Do not be anxious because of short - term ups and downs. Market fluctuations are normal. Investment goes against human nature. The more you toss around, the easier it is to lose money. Define financial freedom realistically. The goal is not "not having to work", but "having the right to choose" - passive income only needs to cover basic living expenses. Most people need a principal of 2 million to 5 million yuan (calculated based on an annual expenditure of 4% - 8%). In conclusion, there is no shortcut on this path, nor is there a "code to get rich overnight". All it requires is to work earnestly every day, invest regularly every month, and check the account once a year. Looking back ten years later, you will be grateful to yourself for persevering today. Financial freedom is not the end point but a choice of lifestyle. However, before that, please first learn to use the simple and reliable methods to earn the money that you deserve.
No comments:
Post a Comment