Emma Liu's Comment

Emma Liu's comment. A relaxed talk on investing from CLEC Investment and Financial Education Academy. Post date: April 26, 2021.

From the time I graduated and started earning money, I borrowed money to live and used my own money, along with money borrowed from the bank, to invest. At my poorest, each month I left only 800 RMB in living expenses for myself and my boyfriend, who is now my husband.

We lived in Beijing, where prices are very high. Many people wondered why, after working for 10 years, I never had savings in hand during those 10 years, even though we both worked in high-paying industries. My answer was that I would not let my money lie there for even one minute.

During those 10 years, I did not live frugally or deny myself food and clothing, but I never bought designer handbags or luxury cars. I was not demanding about clothes either. It is very important to distinguish between what you need and what you want.

During those 10 years, I let myself work happily and live easily, but I squeezed my money workers extremely hard and did not let them rest for a single day.

So reaching financial freedom in 10 years is actually very simple. People just do not do it.

While investing in real estate and index funds, I kept sharing this with people around me. They could actually see that by age 30 I already had so many assets. But very few people took action.

I cannot understand it. Maybe changing a person's thinking is just too hard. During those 10 years, I kept learning about investing and personal finance, not speculation.

I found that in personal finance, the technical knowledge is actually quite easy to learn. One year is enough. What you mainly learn in personal finance is mindset.

That may depend on fate. It is like how I find it hard to believe in religion. Many people always feel that I am doing something like licking blood from a knife edge. But in my view, the more quality assets I own, the safer I am, because when any volatility comes, I have a lot of room to turn around.

People who only hold cash are actually the ones in the most danger.

I also found that people cannot accept their own money falling and think that is risk, yet they can accept watching other people's assets rise while their own money stays unchanged, which actually means their money has depreciated. But they do not think that is risk. Shouldn't these both be equivalent risks?

Human nature, emotion, fear, and greed really are roadblocks on the path of investing. Maybe many people cannot understand these words, but when I hear what you say, I feel as if I have found a close friend and a strong resonance.

When I tell others about my financial philosophy of buying real estate, buying indexes, and holding them long term, I hear two kinds of doubt.

One kind of person thinks I am doing something extremely risky. They say that if prices fall, everything will be over, and they prefer principal-protected wealth management products.

The second kind likes buying Tesla, likes buying SPACs, and wants stocks that may grow 30 times in the future. They look down on the slow gains of indexes.

Then, looking across the past 10 years, I found that they all spent more time and more effort on personal finance and investing than I did, but I was the one with the richest assets.

So I strongly agree with what you say, but I can also understand that your road is long and difficult.