A practical guide to realize the dream of 654.38+0 million.

The Road to Financial Freedom is an introductory book on financial management written by Schaefer for adults. His other book, Qian Qian the Puppy, is an enlightening book on children's financial management, which is also suitable for adults.

The subtitle "The Road to Financial Freedom" earned your first sum of 6,543.8+million in seven years, which is very eye-catching. In fact, it refers to 6,543,800,000 euros, which is converted into about 6,543,800,000 yuan. For China readers, seven years is actually100000 yuan, which is more realistic and feasible.

This book aims to tell people to understand money correctly, awaken our wealth knowledge, and provide practical skills for accumulating wealth, solving financial problems and finally realizing financial freedom.

The author Bodo schaffer is a top financial master in Germany and is known as "Buffett in Europe". 16 years old, he went to the United States alone, but he was in financial crisis at the age of 26. Later, through learning, he changed his view of money and adopted the correct investment concept and method, successfully getting rid of the debt crisis and realizing financial freedom. After that, he began to spread his idea of money. The Road to Financial Freedom and Qian Qian Dog have sold more than10 million copies worldwide. This point, like Robert Toru Kiyosaki, has been publicized all over the world to help people understand money correctly and embark on the road of financial freedom.

The book Road to Financial Freedom has *** 14 chapters. I think this book has three parts. One is a correct understanding of money, the other is a practical guide to investment and financial management, that is, how to achieve the first 654.38+0 million in seven years, and the third is about financial security, financial security and financial freedom.

Because the reading notes are relatively long, they are divided into three articles. This is the second practical guide to realize the dream of 6.5438+0 million.

In The Road to Financial Freedom, from chapter 6 to chapter 1 1, Schaefer provided practical skills for accumulating wealth on the basis of changing the concept of money.

According to the goal of seven years/kloc-0 million yuan, it can be achieved according to the following steps. First, solve the debt problem. If you are heavily in debt, talk about accumulating wealth. The second is to increase income. The third is saving, which is a key step. What makes you rich is savings, not income. Fourth, money can bring more money through the miracle of compound interest. The fifth investment principle is an investment principle that needs to be followed in order to obtain a high return on investment and generate the power of compound interest.

First of all, the supreme wisdom about debt

Everyone has debts in today's society. Daily use of credit cards, other small consumer debt, big mortgage, all kinds of debts.

Debt is divided into wise debts, such as mortgage, which is based on the value of the house. Stupid debts, such as consumer loans, Schaefer said, consumer debt has no advantages, and using consumer debt is very dangerous.

So we need to repay the credit card on time to avoid the expected phenomenon. In addition to mortgage, we should try to avoid various debts such as consumer loans. For example, Huabai, Lending Bank, JD.COM Baihang, Micro-loan and installment payment with interest are all consumer loans, which are short-term loans to guide consumption.

Faced with the temptation of various commodities, we should ask ourselves, is this expenditure really necessary? Do I have to spend this money? When you can't meet this kind of consumption immediately with money, learn to procrastinate.

If you are in debt crisis now, Schaefer suggests following the 50-50 principle. For example, if you earn 3,000 yuan a month and your living expenses need 2,500 yuan, that leaves 500 yuan. At this time, 250 yuan should be used to repay the bonds and 250 yuan should save them. Never use all your savings to pay off debts.

The best way to overcome debt is to accumulate wealth. It doesn't matter how much debt you have. Start saving money now. Maintain strict self-discipline until you pay off your debts.

Schaefer said that in the past, the definition of freedom was to be able to do what you want, but now the new definition of freedom is that freedom means to carry out planned things in a self-disciplined way. This definition was inspired by the Babylonians, who created a lot of wealth, kept self-discipline and never borrowed money from lenders.

Here, Schaefer tells a short story of his own. In order to pay his debts, he didn't have a door handle in the driver's seat of the car. He resisted the idea of trying to buy a new door handle with 65,438+080 marks, and saved the 65,438+080 marks as planned. In order to avoid embarrassment, every time he stops, he makes the driving side of the car close to the wall or close to another car, so it is natural for everyone to see that he can only get on the bus from the co-pilot. This lasted for 8 months, not only accumulated the first cash reserve, but also paid off all debts.

This incident gave the author great confidence and let him know that the best performance of self-discipline is said to be the implementation of planned things.

In a word, firstly, we should insist on not having consumer debt. Secondly, it is not important whether there is debt at present, but it is important to deal with it in the right way. Make a debt repayment plan, accumulate wealth and pay off debts at the same time. Until all debts are paid off.

In other words, to realize the dream of wealth of 65.438 billion, first of all, there are no unreasonable debts such as consumer loans, or the debts such as consumer loans are paid off as soon as possible. Otherwise, there is no so-called wealth accumulation.

Second, ways to increase income.

1. Change your attitude towards work.

You should pay more than others expect. If you want to get 8 hours' salary, you should work 10 hours. This view is very different, breaking the inherent view of many people.

Shafer said, "Everyone gets exactly what he deserves." Instead of what people think, "I am far more valuable than what I have now." If you "deserve" more, you should have got it long ago.

What is emphasized here is that in order to get more returns, you must give as much as possible. On the one hand, you can show your value in your work. If you do more than expected, your colleagues and leaders will look at you with new eyes. With your grades, you will have the possibility of a raise and promotion. On the other hand, you will constantly improve your professional ability. Take work as your own career and make continuous progress. Even if the leader can't see your efforts, you will continue to make progress and there may be better opportunities waiting for you.

People should not passively think about asking others for a salary increase, but should take the initiative to get a salary increase through their own efforts, that is, you are responsible for your own income.

Think about the people in the unit who take the initiative to take on more responsibilities and tasks. Do they do a good job and earn more?

Money and opportunities are not generated by demand, but by ability. You won't get a raise because you need more money, you will only get a raise because of your ability.

Give full play to your strengths in your work, and your strengths and advantages will often make you earn more money.

Take colleges and universities as an example. Teachers with strong scientific research ability should apply for high-level scientific research projects as much as possible. They have both scientific research funds and high-level thesis awards, and their salaries are bound to be higher than those of ordinary teachers.

Teachers with strong teaching ability should give full play to their advantages in teaching and become famous teachers and popular good teachers. There are also teachers who are good at taking students to carry out innovative activities of college students and win national competition awards. You will also be rewarded by the school incentive plan, and your salary will naturally increase.

If you just think about waiting and relying, and don't take the initiative to undertake more tasks, naturally there will be no more achievements, so there will be no extra incentives and rewards besides the normal salary of the school, and the salary will not be raised. It is also possible to reduce wages because of slackness and failure to complete the necessary post functions. The principle of rewarding the superior and punishing the inferior should be applied to any unit.

2. Become an expert.

If you do what everyone does, you will only have what everyone has. If you want to be by going up one flight of stairs in salary, you need to be different.

If you are a doctor, aim to be a famous doctor; if you are a teacher, aim to be a famous teacher. When you become an expert, your chance comes.

Autumn leaves, for example, are good at PPT production, keep learning and improving, and become experts in this field. Publishing books, giving lectures, and operating from the media, the income naturally rises.

Even if you can't become an expert immediately, you should take this as your goal, keep learning and improving, and make more progress every day through continuous efforts, so that your achievements will continue to emerge and your income will continue to increase.

My specialty can be in the field of work or outside the field of work, which is what we often say to increase my income through part-time work.

Today, with the rapid development of the media, many people have earned a good part-time income through their own specialties, such as writing, WeChat official account, live broadcast and so on.

3. Focus on lucrative activities.

Everything follows the 28 rule, and so does increasing income. Maybe 80% of your income comes from work, so spend your time on activities that can get rich income.

By analyzing your own income, find out the unique and rich income items that suit you, concentrate your spare time on these activities and give up other useless things.

What makes you rich is savings.

The person who spends money and saves money is the most satisfied person, because he likes both. -Seymour Johnson

No one can become rich just by making a lot of money. Wealth comes from your reservation of money.

Many people have the idea that when I earn enough money, I will be rich. On the contrary, however, with the increase of income, people's needs are also increasing, which just matches your income. And income can't keep up with the growth of demand. The more you earn, the more you spend. So Schaefer said, if you don't save money, you can only be in debt.

Shafer used to be an optimist, thinking that once he made a lot of money, everything would be fine. But it turns out that this is an unrealistic hope. Nothing will change if you don't change yourself. Wealth will not come to us on its own initiative, and we don't have to change our existing view of money. This idea is all wet.

Change immediately and start saving.

Buffett has been saving money since he was a child. He saves every dollar as much as possible, and he is always concerned about the wealth he will have in the future.

Even though he later became the richest man in the world, he still kept this habit, being frugal and not spending money indiscriminately. Thrift is certainly not the only reason for prosperity, but thrift is the premise. Without this foundation, prosperity is hopeless.

Saving is not saving money, but becoming a grand platform. Savings should be regarded as paying for yourself, paying for yourself, paying for yourself.

It's simple. When you pay your salary every month, you should first save 10% of your monthly income, so that this 10% will make you happy and rich, and the remaining 90% will be used for other expenses.

You will be surprised to find that living with 90% of your income is actually no different from using 100% before. So you won't miss the savings of 10%. Ordinary people don't feel that their lives have changed much because of the loss of 10%.

When you have a salary increase or year-end bonus, you will withdraw 50% and put it into your savings account every time to continuously improve your savings rate.

Remember to pay yourself immediately at the beginning of each month or when you pay your salary, and at the same time strictly control excessive expenses. This is an important means to ensure that the savings plan will not fail.

Saving money may seem hard to stick to, but not saving money will bring you more difficulties. Once you are short of money, money will become an important part of life. Maybe it will be too late then.

Fourth, the miracle of compound interest

Money is only reserved for those who understand and abide by the laws of capital. George Seymour klassen

The man who increases the value of his money will become a rich man. And people who ignore the law of currency appreciation will lose his money.

Compound interest is called the seventh wonder of the world, which is more powerful than the atomic bomb. It just takes time to verify, and many people may not see this miracle because they don't have the patience.

If you want to realize your dream of 6,543,800 yuan in seven years, as long as you insist on saving at different interest rates, it will be easy to achieve, and everyone who insists on it can achieve it.

If you save 9000 yuan a month, with an annualized rate of return of 8%, you can achieve the goal of 654.38+0 million in seven years.

Some people say that the yield of 8% can't be achieved, but we can reduce it to 6%. We only need to save 9500 yuan every month, and we can realize the dream of 1 10,000 in seven years.

There are three important factors affecting compound interest, time, rate of return and investment.

Of these three factors, investment is savings, and no matter how high the profit rate is, it is useless. On the basis of investment, we must consider the profit rate. The higher the profit rate, the faster the wealth will accumulate.

There are two important rules about compound interest, the 72 rule and the 1 15 rule. Rule 72 is the time required to double the principal, and rule 1 15 is the rule to triple the principal. The formula is 72 or 1 15 divided by the quotient of the annual rate of return.

For example, the annual income is 5%, so 72/5= 14.4 is used. In other words, the investment can be doubled in about 14.4 years; If the annual income is 7%, the investment can be doubled with 72/7= 10.3, which is about 10.3 years; If the annual income is 10%, the investment can be doubled by 72/ 10=7.2, which is about 7.2 years.

The rule of 1 15 is to calculate the time for 1000 yuan to become 3000 yuan, that is, to become three times the time. The calculation method is still the same. Using 1 15/x is the year when the principal becomes three times more important. For example, if the income is 10%, then the time for 1000 yuan to become 3000 yuan is115/10 =1.5 years.

The accumulation of wealth takes time, so there is an early rule in financial management.

Since the age of 30, you have deposited in 200 yuan every month with an annualized rate of return of 12%. At the age of 65, you had 1 160000 yuan, which worked for you for 35 years.

45 years old, need to deposit 1200 yuan every month, annualized rate of return 12%. At the age of 65, you only have 1 1600 yuan, and this money has been working for you for 20 years. To achieve the goal of 1 160000 by the age of 65, you need to save 6 times of 200 yuan every month.

55 years old, need to save 4950 yuan a month, annualized rate of return 12%. At the age of 65, you only have1160,000 yuan, and the money has worked for you for 10 years. To achieve the goal of 1 160000 by the age of 65, the monthly savings will be 24.75 times that of 200 yuan.

To sum up, to achieve the goal of1160,000 yuan and annualized rate of return 12%, you need:

Deposited in 200 yuan every month for 35 years, or 1, 200 yuan every month for 20 years, or 10 * 4950 yuan.

So, the earlier you start, the easier it is. More importantly, we should teach children the concept of saving. Invest in 200 yuan every month from the birth of the child. When the child is 18 years old, it will be150,000 yuan. If you invest in 500 yuan every month, by the time your child is 18 years old, there will be 370,000 yuan, which can meet the educational goal of studying abroad.

If you don't let money serve you, you may serve money all your life.

The story of "Golden Goose Laying Eggs" in Aesop's Fables must be well known. Because of his greed, the farmer killed the goose that laid the golden egg, and then he never got the golden egg again. This story tells future generations not to kill your goose.

If you don't have the "goose" and the principal to make money, then no matter how much money you earn, you are just a money-making machine.

Verb (abbreviation of verb) investment principle

In chapter 11, Schaefer discusses the principles that investors and shareholders should follow. I think this part should be combined with other investment books as a special study, and the main content of "The Road to Financial Freedom" is an introduction to financial management, telling people how to eliminate prejudice against money, avoid consumer debt, how to save correctly without changing lifestyle, and how to increase income substantially. Here is just a brief introduction to the investment principles.

Schaefer talked about seven principles.

Principle one, identify when to invest and when to speculate; Principle 2, distinguish between debt and investment; Principle 3, determine the type of assets; Principle 4: tangible assets prevail over monetary assets; Principle five, you must take risks; Principle six, diversify investment; Principle 7: Investors are different from ordinary investors.

Among these seven principles, I think the following three principles are the most important for ordinary investors.

We should make it clear that most people are ordinary investors, and their biggest feature is to invest in their spare time. If you want to be a real speculator, you need to keep learning and spend a lot of time investing.

1. Identify investment and speculation.

Schaefer believes that only by significantly increasing his own money can it be called investment, otherwise it is speculation.

For example, putting the accumulated money in the bank is speculation. Because of the deposit in the bank, the money has not increased significantly, and even inflation can't run away. We buy houses, jewels, cars and so on. For the sake of life, these are all speculative behaviors. Investors get benefits from buying investment products, not waiting until you sell them. Only when you sell these properties can you make a profit.

An investment will have a fixed return from the beginning. As long as there is no income, then you just invested money and didn't invest. Investors can get regular income from investment projects. Whoever wants to make a profit while reselling is not an investor, but a speculator.

In Schaefer's view, in addition to dividends, only selling stocks can make money. At the same time, you may make a profit or lose money. But if you buy stocks and funds with safe dividends, you can rule out most accidental factors. Dividends are funds paid regularly by enterprises, that is, income. Stocks held for dividends are investments.

There are also two classic investment behaviors, investing in real estate and starting a company.

From what has been discussed above, investment is not easy. As an excellent investor, it is very important to combine investment with speculation and choose a stable portfolio to reduce risks.

2. Distinguish between debt and investment

Regarding debt and investment, in fact, the book Rich Dad and Poor Dad has given a very accurate answer. "An asset (as an investment) is something that can put money in your pocket. Debt is something that comes out of your pocket. "

Many people have little financial accumulation. Not because he earns less, but because he spends too much money and invests too little. The more debt, the less investment.

As mentioned above, houses, jewelry, cars, etc. used for living. They are all liabilities, and only when they are sold beyond the cost will there be speculative gains.

investment diversification

For stocks, funds, real estate and other investments, they are all high-risk products. In order to reduce risks, it is necessary to diversify investments.

In a word, revenue and expenditure = balance. In order to realize the dream of wealth accumulation of 65.438 billion yuan, we must increase income and control expenditure to achieve more balance, and let the snowball of wealth roll bigger and bigger through the power of investment and compound interest.