This life, each stage has things to do and distances that can be calculated.
This section starts to give assets a physical examination
It's not about 'what to buy', but 'which of the things I hold are appreciating and which are depreciating'.
Verification Signals (count as valid if two or more are met):
· Asset structure unchanged for five years
· All assets are bound to the same industry/same asset
· No cash flow assets (all are non-income producing)
Definition of Asset
Give assets a physical examination, look at three:
① Does it generate cash flow?——Rent, dividends, copyrights, customers
② Can it resist inflation?——Will the purchasing power still be there in ten years
③ Can it be converted?——How long can it be turned into money in an emergency
After 35, the most alarming is「It looks like an asset, but it's actually a liability」: Houses or businesses that do not generate income, require continuous investment, and cannot be sold.
Assets can be maintained
Not eaten by inflation
One day can be converted
Definition
Asset Diversity · Proportion of Cash Flow Assets · Liquidity
How to Calculate
How many types of assets; how many types generate income; months of liquidity
Healthy Range
≥3 Types · Cash Flow Assets ≥20% · Liquidity ≥6 Months
Thinking that houses will always appreciate in value —— Population and supply and demand are changing
All cash —— Inflation eats away at a part every year
All non-income-producing assets —— Look rich, but actually fragile
Chasing the market —— Buy high and sell low
Not making adjustments —— Structure aging is more dangerous than making the wrong choice
Inventory: How many types of assets do I have, how much each one is, which ones generate cash flow
Remove the part that does not generate income and cannot be converted
Increase cash flow assets (rent/dividends/customers)
Keep 6 months of liquidity, this is the bottom line
Examine once a year, do not move frequently
This page does not collect any of your asset information. All indicators are proportions and multiples, you can calculate them in your mind, no need to input or upload.