This is an investment and financial management article for beginners.

Many friends wrote to ask how to start investment and financial management?
Are you ready for financial planning and asset allocation?
Only then did I discover that,
Many friends have not yet learned how to manage money, but they are eager to get into investment assets and make a lot of money to get rich over night.

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But things in this world are not like that.
To learn something, there are basic skills to do.
For example, when learning mathematics, first learn addition and subtraction, and then learn multiplication and division, step by step.

Here I will introduce six steps to financial freedom for beginners in investment and financial management:

1. Work hard

2. Financial Planning

3. Asset Allocation

4. Understand the business model and the essence of investment

5. Build Passive Income

6. Financial freedom

Each stage is now detailed:

1. Work hard

First of all, the first stage is a process that most people will go through, which is to work hard. Because there are too many people in this world who are ambitious and want to get rich overnight. They can’t even do the most basic work well, and there is no way to make themselves stable. It is very difficult to invest and get rich like this. Because of my financial insecurity, it is easy to make mistakes in the part of investment and financial management. Therefore, I strongly recommend that everyone be serious before entering the world of investment and financial management. Work. Make sure you have a steady cash flow to build up your assets.

2. Financial Planning

The second stage is financial planning, the focus is on how to maximize the value of every sum of money you have. To maximize the value of every sum of money. Let your life have the principal. Or let your life have no worries. So Financial management and investment are two completely different things. And it is necessary to learn the knowledge before investing. The so-called financial management is to learn to allocate budget and use money consciously. You have already done the basic skills of financial planning.

3. Asset Allocation

The third stage is asset allocation. The main purpose is to effectively increase returns and reduce investment risks in the investment market.

4. Understand the business model and the essence of investment

The fourth stage comes to the business model, the purpose is to understand how a company makes money. The essence of the so-called investment is actually the business model. Especially for value investment as the main investment. If you don’t understand how a company makes money, and financial statements It is difficult for you to make a correct decision on why such a result is presented. Wait until you have enough funds to invest in a new business body. Or invest in people around you to create a new business. Therefore, investing In the end, the essence of business still comes back to the business model. How does a business create cash flow and how to maximize profits. Even one day your own business needs to introduce investment.

5. Build Passive Income

The fifth stage is to establish passive income. Why is the establishment of passive income after the business model? Because the business model is to establish an operational cash flow system to provide a series of business services to earn profits.
But the main difference between active income and passive income is whether you participate in it or not. For example: You are running an online store now. You buy goods from China and sell them to customers in the Philippines. Then the Filipino customers pay your income to deduct the purchases The cost. The price difference is your cash flow. But here comes the problem, you have to order by yourself, set the price by yourself, reply to customers by yourself, and ship by yourself, so you are always in the system. This is a business model, but it is just an active income not a passive income. Only when you get out of the system, it will become a passive income. Now there are many factories in China and they have a business model that is: I just order the goods and give them an order. They can even Paste my brand and ship directly to my customers. Someone will do it for you in the middle of the logistics work. That will cut down half the processing time. Then, at the front end, you need to face the customer. Confirm the order, To collect money. Now there are many convenient automatic payment mechanisms on the Internet that can be applied for. In the part of confirming the order, you can hire an assistant to assist you in processing the order. Or this can be automated through the website system. When all links are automated After that, you don’t need to get involved, the business model system still operates on its own. It can become passive income. The application of passive income can be used in many places. For example: run a website, or run your own small business body. Or compare The common way is to invest funds in the stock market and then receive dividends regularly. This is also a kind of passive income in finance.

6. Financial freedom

Finally comes the stage of financial freedom. The so-called financial freedom is that the passive income is enough to pay for living expenses. Then you don’t have to do anything, and the passive income will naturally enter your pocket. Basically, you have reached the state of financial freedom. You have time to do what you want You also have enough money to do what you want to do. When you don’t have to worry about money, you can truly face your purpose and value in life. What is the most important thing in the world to you? In the course of our life, after graduating from university, we worry about getting a good job. We may also worry that the salary is not good enough. We may worry about not having enough money when we buy things. Only then will you have a deeper understanding of what you really want?!

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