preface

I’m glad to see this chapter. For myself, I did not pay attention to financial management before. Always feel that this is a matter that has nothing to do with themselves, but also their disdain. This is probably a typical student thinking, a student spirit, disdain for the smell of money copper. It was about the last year that I realized how important money was, because it cost a lot to see a doctor.

Now I love money even more, because money can travel, can eat their favorite food. You can buy nice clothes and shoes. Of course, the love of money now is also because money oppression is too severe. Now there’s the matter of finding a girlfriend. My parents are always forcing me to go on blind dates. I don’t want to go. Once when my brother helped me persuade my parents, he said a sentence that impressed me very much: “Now I am anxious for a blind date, can I afford to marry a mate? You can’t afford to get married.”

It was a bolt from the blue. We calculate an account together, in our village, marry a girl almost also get 500,000 yuan. Half a million. I had to scrimp and work until I was 31 to marry a farm girl. I had never thought so far ahead before. Now face such thing, blush extremely. It’s so hard to make money. I can’t live on my salary alone. So life can’t be that simple, you have to have some other income to live the life you want. You think a girl wants to marry a guy who doesn’t have that kind of money? I asked a couple of girls around me, and they all said no. Rv’s a must.

However, I have not found any good financial management methods, but the author gives a lot of advice in this chapter. But I don’t know if it’s feasible, the Chinese empire is different from the American empire, but the idea is worth learning from. I’ll try it when I get the chance.

The first few chapters are also very exciting, if you are interested, you can read them.

The other chapters are wonderful, if you’re interested. Of course, if you can, I hope you can give me a like or follow, every week I will strive to share helpful career dry goods.

Soft Skills – Survival Guide Beyond Code 1

Soft Skills – Survival Guide Beyond Code ii

Soft Skills – Survival Guide Beyond Code 3 (Self-Study)

Soft Skills – Survival Guide Beyond Code 4 (Productivity)

Soft Skills – Survival Guide Beyond Code 5 (Finances)

Soft Skills – Survival Guide Beyond Code 6 (Fitness)

Soft Skills – Survival Guide Beyond Code 7 (Spirit)

Chapter 49 How do You Spend Your Salary

Over the course of your career, if you work for 30 years and get paid every two weeks, you will get paid 780 times. If you work for 40 years, you get 1,040 paychecks. How you spend those paychecks during that time will determine how long you work, how much you save for retirement, and even whether you can retire at all.

49.1 Reject short-term thinking

Most of us take a short-term view when it comes to money, not the long term, figuring out how much something will cost this month rather than the total.

This kind of thinking is very dangerous. It often leads us to live on exactly the same or even more than our income. This kind of short-term financial thinking has never led us to success, because the more we earn, the more we spend.

Many people spend more when they earn more. The more they earn, the more they spend. It’s unwise for them to use up all their credit to buy a bigger house or a nicer car because they think they deserve it.

Personal comments: I personally don’t understand why many people are willing to buy a computer or a mobile phone in installments. Some people really have no money, no money to buy luxury goods, this is not a job? Some people have money, but they don’t want to pay that much all at once, so they choose to pay in installments. It’s like trying to hide the truth. Isn’t interest money?

49.2 Assets and liabilities

An asset is something worth more than it can be maintained. Assets must be worth more than they are.

A liability is something that costs more than it is worth. To stay in debt, you have to pay out, but you’ll never get back as much as you paid out.

If the price of your house is higher than the cost of your basic shelter, it is a liability to you. For most people, a home is a huge liability because they get no extra utilitarian value from it, and it doesn’t give them more value than renting. (The author has a misunderstanding here. Houses will increase in value, and many people in China have made their fortunes on houses.)

The same goes for cars. You just need a means of transportation, but if the money you spend on a car doesn’t give you more value than buying a cheaper car, it’s a liability. (I agree with Kai-fu Lee that when you buy a car, you only use it 3% of the time, but it’s expensive.)

Realize that some things you buy will give you output or produce more value than your initial investment, while others will drain your income or not be worth the money you paid for them

49.3 Become a millionaire

Let’s say I make $150,000 a year, and after 30 percent taxes, I end up with $105,000. I want to survive, even if I scrimp and save, on $35,000 a year. So, I save $70,000 a year. If I save $70,000 a year, I’ll be a millionaire in 14 years.

So even if I were lucky enough to get a good job, I would have to work hard for 14 more years to become a millionaire, living extremely frugally and saving as much money as I could during that time.

After doing the math, IT became clear to me that in order to truly become rich one day, I would not only learn to “cut back” — not waste my salary on debt — but also learn to “open source” — invest a significant portion of my salary in assets that would help me make more money.

If you want to succeed financially, you have no choice but to learn how to invest. Even if you work your whole life and save as much as you can, you’ll never become rich, let alone financially free, if you don’t find a way to manage your money.

Personal assessment: the author is already very good, coding can make $150,000 a year, most of us don’t even make 100,000 RMB a year

50 How to Negotiate salary

Salary negotiations begin before the job search

Your salary negotiation ability is heavily influenced by reputation, and the more well-known your name is, the more power you have in the negotiation. I strongly recommend that software developers build personal brands and actively market themselves. Make yourself as famous as possible.

50.2 Ways to get work done

The second biggest factor that affects your ability to negotiate is how you get the job.

First, you see a job Posting and send your resume, preferably with a nice cover letter, to apply for the position. It’s the worst way to get a job, and it’s hard to get a leg up in a salary negotiation.

Second, another way to get the job is through referrals. You are borrowing your referrer’s credibility in the company, which greatly affects your salary negotiation ability when you enter the company.

The sweet spot: a company knows you and offers you a job without any interviews. In that case, you can price yourself according to your reputation.

The first bidder loses

Whoever bids first will be at a significant disadvantage. In any negotiation, you should act as the second bidder.

The first question you’ll be asked is, “What salary are you looking for?” You say, “I’m looking for a salary of about $70,000 a year.” Or maybe being smarter, you might say, “I’m looking for $70,000 to $80,000 a year.” The HR manager immediately says, “Let’s go for $75,000.” The hr manager’s budget for this position is $80,000 to $100,000. As a result, you get $25,000 less each year because you bid first.

Bidding first puts you at a significant disadvantage. You can’t go any higher.

What happens when 50.4 is asked to bid

Never bid first. Just say “No”

Before the interview or before filling out the job application, you may be asked about your expected salary. If this field is on the job application, leave it blank if you can, or simply fill in “Negotiable based on overall compensation package.” If you have to put a specific number, put it down as $0 and explain why later.

If you are asked directly in a pre-interview how much you are looking for, give the same answer, saying it depends on your company’s overall compensation package, including benefits.

Try to be tough, let them bid first, and make a big offer if you have to. (Personal evaluation: or not bid the good, give a large range, large Chinese wages are usually also according to the lowest price to you)

Asked about current salary

This question is really hard to answer. Technically, it’s none of their business; But you can’t say that outright. Instead, you still have to work around the problem. You can also say, “I don’t want to answer that question,” or “I have a confidentiality agreement with my current employer that prevents me from discussing salary specifics with others.” (Personal experience: You can say a lot more than your actual salary. If what you’re saying is true, they’re either offering you the price or 20% more than you were making before. The specific amount I’ll give you depends on the lower one.

50.5 When you get the offer

When you get the offer, you can still negotiate, but it will make a bad impression on the other party. The worst they can do is stick to their offer and tell you to take it or leave it. But if you think the company is good but underpriced, I personally strongly suggest you renegotiate. Usually an extra 1k is perfectly fine.

50.6 Final advice

Make sure you know what you’re worth. Research the salary range at the company you’re applying for in as much detail as possible, and research the salary range for positions similar to the one you’re applying for. The reason for asking for such a salary is not “I need this much money”. No one cares what you need. Instead, explain why you’re worth it.

Personal assessment: SEEING this problem I have a belly fire big. Personally, I’m not a confident person, so the price is usually lower. As a result, every time I offer the same price as the offer. I didn’t find out until I got hired. I am responsible for a lot more things than others, work experience is longer than others, work ability is better than others. But our salaries are about the same. When hiring, human resources will quote you the lowest cost. It’s not about your ability. They recruit employees in the spirit of leakage.

Options: Where all the fun is

Options: Choose what to do or not do. The basic idea behind options is to allow someone to pay for the right to buy or sell a stock at a future date.

Let’s take a closer look at how options actually work. Let’s say you’re going to invest in Microsoft because you think their share price is going to jump when they release a new operating system in a few months. You want to buy thousands of Shares of Microsoft, but there are two problems. First, you don’t have enough money to buy that many Microsoft shares. Second, you think the stock might crash if Microsoft’s new release isn’t great.

If you just want to buy stocks, you have to put up a lot of money. Misjudgment can be costly. But what if you know someone who owns Microsoft stock and they agree to sell it to you for a slightly higher price when the new OS comes out in a few months? That’s exactly what options do.

Sound too good to be true? But that’s what options are. To get options, you have to pay. You can buy the option to buy Microsoft stock in the future, but you have to pay a certain amount of royalty in order to get the right. If the deal goes ahead, you buy the right to purchase a number of Microsoft shares at any time in the next three months. You can buy the shares at the agreed price (also known as the “strike price”) in the future when Microsoft’s stock price is higher than the price at which you bought the option and make a huge profit.

If the opposite is true, and Microsoft’s stock price doesn’t rise above your strike price, or even drops, then you can choose not to exercise the option, or not to buy the stock. In this case, you’re just losing the premium you paid to buy the option.

So let’s say you have $1,000, and t-Mart is $100 a share, and before you could only buy 10 shares of T-Mart, but now you can use the option to reserve 100 shares of T-Mart at $10 a share. If T-Mart’s stock rises to $200 a share in the next three months, you’re not making $1,000, you’re making more. Let’s figure out exactly how much money we’re actually making.

If you can exercise the option to buy 100 t-Mart shares at $110 per share ($100 at the scheduled time, $10 per share, adding up to $110 per share), the final cost is $110 per share x 100 shares = $11,000. And then you sell those shares at $200 per share, so you’re going to get $200 per share times 100 shares, which is $20,000. If you subtract the $11 million you paid for the stock and the $1, 000 you paid for the call, your final return is 20,000 — 11,000 — 1,000 = $8, 000.

51.1 In-depth understanding of options

An option basically gives you the option to buy a number of shares at a fixed price on a future date. But you can also buy another option that lets you sell a certain number of shares at a fixed price until a future date.

In addition to buying options, you can also sell options. This is technically called a “put” because you create an options contract that someone else can buy. When you write an option, you are actually betting on the other side of the bet. You are not betting that the stock will go up or down, but that it will either stop at its current level or move in the opposite direction of the option.

Options can be far more complex than calls, puts and puts. Options can be combined with options, and options can be combined with stock trades to create complex trading positions.

If you’re interested in options, read more about them on your own.

Personal evaluation: I personally feel that the author puts too much emphasis on the benefits of options, giving people a feeling of pie in the sky. Options are certainly risky, but the authors seem to have avoided it. So buy options carefully. Let me add one more thing here. I have seen some interviews before, and Lao Liang once said something that impressed me deeply. He said that it is completely impossible for poor people in China to dream of becoming rich by stocks, lottery tickets, funds and other things. Chinese stocks and lotteries are leek harvesters. Put in only by others to play the life, so I think buy stocks, options must be cautious

52 Real Estate Investment

Of all the investments an individual can make, I think real estate is by far the best. There is no other investment that guarantees long-term returns and allows such high capital liabilities as real estate. But that doesn’t mean investing in real estate is easy. Investing in real estate is not like trading stocks, which can be done with a few clicks of a keyboard. Real estate investment requires a huge amount of capital; Given that software developers earn more than other industries, I think software developers are a good place to invest in real estate.

52.1 Why invest in real estate

The biggest reason to invest in real estate is stability. Although real estate prices can fluctuate wildly, I recommend investing in rentable properties. A stable income for this kind of property is rent.

Suppose you buy a $100,000 rental property, of which you cover 10% of the down payment and 90% of the loan is provided by the bank. The property you’ve chosen is what we call a rent-to-rent loan, meaning that all expenses, including the mortgage, taxes and insurance, are covered by the rental income it generates. In this case, we assume that the rent will cover all expenses and that there will be no excess cash flow, or very little cash flow.

It would be great if that happened to be the case. If you take out a 30-year loan on the property, after 30 years your initial investment of $10,000 has grown to at least $100,000, or more if home prices rise. Your loan is essentially repaid by your tenant, while you get a property for free. I think it’s a good deal.

But it could be better. The leverage of this investment allows you to get a higher yield from rising house prices. A 10 per cent rise in house prices in two years is not unrealistic. Let’s say the value of your home rises 10% over two years to $110,000. What is your return on investment?

Leverage allows you to earn big returns with small price appreciation, with little risk. And since the collateral for the loan is property, technically the most you can lose is your initial investment.

Let’s go back to inflation. As we mentioned earlier, if you have inflation, the value of your debt will go down, and so will the value of your bank account. Real estate is one of the best hedges against inflation.

Let’s also take that $100,000 house you bought. In this case, let’s say your rent is $1,000 a month, and your mortgage plus taxes, insurance and other expenses happen to be $1,000 a month. But inflation sets in, eating into your savings and shrinking your income, but also causing rents to rise. You might be able to charge $1,200 a month in rent while your mortgage and other expenses remain flat at $1,000 a month. Now your cash flow is + $200, which makes up for the negative impact of inflation.

52.2 What did I do?

Smart real estate investing (not speculation) begins with the realization that real estate investing is a long-term investment. If you believe you can get rich quick by flipping your house or buying a mortgage for a fraction of the price, you will come back to haunt you.

Buy a rental property. The property is either a positive cash flow or a 30-year fixed-rate loan. This is a strategy with minimal risk, but huge upside; Even if the real estate market is hot and the price is skyrocketing, it will guarantee you a fully paid home in 30 years.

52.3 learning

In real estate, the most profitable time is when you buy, not when you sell.

What is the price of a house? Who knows? For the same property, 10 appraisers will have 10 different valuations. In some cases, estimates can vary widely without market data and similar properties for sale.

This means that if you are smart and diligent, you can buy real estate at a substantial discount. You just need to be able to identify good deals and know how to get a good deal.

To master how to spot good deals, you need two things: practice and market research. It’s something that you have to dive in and explore for a long time.

How can you bid to get a good price for the property? To do this, you calculate all the numbers related to the property. You’ll need to estimate the cost of the mortgage based on the home price, as well as other expenses including taxes, insurance, owner’s dues, utilities, property maintenance and so on.

52.4 Take action

When I’m ready to buy a property, I sign up with a real estate agent to send me a message as soon as a new property comes along that meets my criteria. If I see a property that is a good deal, or if I think a property can be offered at a low enough price to make it a good deal, I will act immediately.

I almost always make an offer so low that my real estate agent is embarrassed to make it. Sometimes the seller will accept the offer, or they will offer a slightly higher price than mine.

This is not to say that most of my offers were not rejected, in fact they were. But it’s just a numbers game. Make 50 super-low offers on a property that only one seller will accept. You might be able to offer a property 50% below market value — maybe the seller is in a hurry to sell or doesn’t care about price. It may be hard to believe how many sellers just don’t care about price for one reason or another. (Personal assessment: It really clicked)

If the house looks good and you have signed a real estate contract, the next step is a house inspection. I always have my house inspected by the best and most careful inspector I can find. If there is a problem with the property, I want to know about it before I put more money into it. Be careful when inspecting houses.

52.5 Use of property trusteeship

I strongly object to managing my own rental property. In my opinion, it’s not worth the effort and it’s a headache. The most valuable money I spend every month is to hire a property management company to take care of my rental property.

Personal assessment: This chapter is absolutely brilliant and does a lot to change my view of the house. The house in our county town used to be very cheap, but I never thought about buying one, because I was thinking about what I would do if I worked outside and didn’t go back home. Instead, I wanted to save my money in Yu ‘ebao, so that I could see the interest every day. Turns out I was really wrong. The house has gone up too much. If I could have bought one then and sold it now, I could have earned at least a year’s salary. However, the interest of Yu ‘ebao is less than 2,000 yuan

53 Retirement Plan

The key to planning for retirement is to use reverse thinking, accurately calculate your monthly living expenses, and figure out how to make sure your income meets that requirement while leaving a cushion for a rainy day.

Many people don’t want to lower their standard of living in retirement because they don’t want to make sacrifices after years of working. At the same time, they don’t want to be penny-pinching in their old age. The biggest determinant of how much money you need to retire is how much you spend each month. If you can cut back on your monthly expenses now, you won’t feel like you’re losing your standard of living later in life, and you’ll retire early.

Once you figure out how much you’ll need to live on each month after retirement, you can officially retire when your “passive income” reaches your monthly living expenses. Passive income is income earned without having to work. You have to make sure that passive income increases with inflation — which is the main reason real estate is a good investment.

53.1 Retirement Plan 1

The first and most obvious way to build wealth over the long term is to make regular contributions to a retirement account or other pension plan. In the U.S., most employers offer a 401(k), a well-known retirement plan where you can put a portion of your pre-tax salary into an investment account. Sometimes the employer will even match the amount of money you put in.

The only downside to this plan is that once you decide to take it, you have to wait until you’re 60 to retire. The strategy here is to put as much money into a retirement account as you can, which will grow and compound. When you reach retirement age, you can withdraw the money without paying any additional fees.

But because you already have all your money in a retirement account, you don’t have money for other investments.

53.2 Retirement Plan 2

If you want to retire early, or if you want to try to really get rich, you should not contribute to a retirement account. Of course, you can contribute to a retirement account until age 60 while contributing to it. Do something else (like real estate), but if you try to do both, you’ll probably end up with neither.

To retire early, you need to figure out a way to build a passive income stream that exceeds your monthly expenses, and you need to be able to make sure your income covers inflation.

You can’t spend $1 million on 2% Treasury bonds and enjoy it. You may be able to make $20,000 a year with little or no risk, but inflation will eventually eat away at your original capital and profits.

You can invest in real estate, but investing in real estate isn’t the only way to generate the passive income you need for retirement. You can choose to buy stocks with high yields, which can rise enough to protect against inflation. You can also create or buy intellectual property to earn royalties. This can be a patent, a musical composition, a book, or even a movie script. You can buy a company, or you can start your own company, and eventually hand it over to someone else, and you just get a cut of the remaining profits.

Since you don’t have much money to start with, you have to start with small investments that you can afford and grow over time.

You have to take incremental steps, always aiming to increase passive income. The more money you make from your holdings, the more progress you make in buying more income-generating assets. Over time, like a snowball, the more income-generating assets you have, the more income you get and the more assets you can buy

54 Liability Injury

The biggest financial mistake you can make is getting into debt.

In fact, I’ve found that many financially successful people, especially software developers, tend to get Mired in debt because they earn more and spend more.

The only way to truly achieve financial success is to make money from money.

The biggest debt-related folly I’ve seen is saving money while still in debt (especially credit card debt). In most cases, the interest you pay on your debt is higher than what you would earn if you kept your money in the bank. So some or most of your money is eaten up by interest, which is stupid.

The second biggest mistake I often see with debt is paying it off in the wrong order. The order in which you pay your debts can make a big difference in how long it takes you to pay them off. Always prioritize debt repayment according to interest rates. Make sure you pay off your highest-interest debt first.

While this may seem obvious, I do see a lot of people making minimum payments on credit cards and other debt. Don’t do that. Instead, pay as much as you can each month to the debt with the highest interest rate, and keep doing so until the debt is paid off.

As ugly as debt is as I paint it, it doesn’t mean that all debt is bad. Debt is good if you can make more money on it than you can pay in interest on it. Buying a house with debt, for example, can be profitable because you won’t have to pay rent.

How did I retire at 33

Ever since I started working, my goal has been to retire early. It’s not that I don’t want to work, or that I’m lazy (although I do have a tendency to be lazy), but I want to be free to do what I want in life.

55.1 The Exact meaning of retirement

I define retirement as “freedom,” specifically, financial freedom. I have never sought to never work again, but I have sought to stop working when I do not want to.

55.2 How did I do it

The following can be summarized as investing in real estate. The author has encountered various setbacks in investing in real estate. Due to his lack of understanding of real estate, he has made many loss-making deals, but he has persisted in buying one house every year. The author was lucky enough to get a high-paying job, build a brand through her blog, and start creating training courses and making a lot of money. By the time the author is about 33 years old, he can earn $5,000 a month even if he doesn’t work. So the author quit his job and began to retire. It’s kind of inspirational.

Personal assessment: the author is really sincere in this chapter. A lot of developers are like me. They want to work hard, improve their skills, and earn a living by their craft. The author shows us another way of life. It’s very enlightening. Try to figure out how to open source, you can live on salary, but it’s hard to live well.