Everyone knows that before the age of 50, Buffett actually did not have much wealth, and he did not even reach a small goal of 100 million. However, after he turned 50, his wealth has been accumulated in large quantities. , whose wealth reaches hundreds of billions of dollars.

Someone asked Buffett what his secret to wealth growth was. Buffett said that the secret is to start investing as early as possible, and that 50% of your personal capital should be invested in the stock market.

So, for most of us ordinary people, should we really start investing and managing money as early as possible, and should we also invest 50% of our personal funds in the stock market?

01 In the context of increasingly high pension costs, investing sooner will become inevitable

What Buffett said seems to make sense now. If you know With how much money a person needs for retirement now, it is no wonder why he needs to start investing as early as possible.

Now that the birth rate of the new population is declining, the traditional way of providing for the elderly is for office workers to pay pensions to support the current elderly. To put it simply, the pensions paid by those born in the 1980s and 1990s are used by the current retirees born in the 1950s; and when those born in the 80s and 90s retire, they may be supported by the pensions paid by those born in the 2020s and 2030s.

But the trend we see now is that the post-80s and post-90s generations have the largest population, the post-00s generation is smaller than the post-90s generation, and the post-10s generation is smaller than the post-00s generation. It is very likely that there are fewer people born in the 20s than those born in the 10s.

It used to be that 3 working people could support an old man, but in the future it may be 1-2 working people that can support an old man. The pressure can be imagined.

Then let’s take a look, how much does it cost for a person to support himself in old age?

Before, a certain treasure and a fund company conducted a questionnaire: How much money do you think you can save to meet your retirement life? The average number given by most people is 1.5 million.

Is 1.5 million enough? The answer is that it only covers the expenses of third-tier cities. For example, in a third-tier city, the per capita disposable income of urban residents in 2020 is about 40,000 yuan.

If the 1.5 million is well invested and managed, 50,000 to 70,000 will be withdrawn from the income every year, which can barely cover the expenses of ordinary people. However, if it is used in first- or second-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, it will not be enough. , because the consumption level is higher.

So, in the current context where tall buildings are being built and people have to rely on themselves for retirement, investing as early as possible will become inevitable for future wealth appreciation. Investing as early as possible here does not entirely refer to financial investment. Also includes self-investment.

The fundamental reason why many people have been doing nothing in their lives and have never achieved any great wealth in their lives is that they have no sense of crisis and have not established their own investment thinking when they were young.

If you can start investing earlier and master investment skills as early as possible, you and your family assets can embark on the path of compound interest appreciation earlier.

02 The earlier you invest, the lower the cost of making mistakes, and the faster you can achieve financial freedom

Whether it is stock market investment, fund investment, or other entity investment, as long as it is investment and financial management, You need to have your own trading system, otherwise the money you earn by luck will eventually be lost by strength.

Take stock trading as an example. Stock trading is like learning to swim. No matter how many great principles you preach, it will not work without getting into the water. Swimming is learned through constant exploration and practice, not by reasoning.

So when investing, you must know how to practice it yourself. Only by trying it yourself and making mistakes can you grow into a master bit by bit and start to make relatively stable profits.

In a complete bull and bear market, you will lose money due to ignorance, and you will also lose money due to inflation. This is normal. But after experiencing it, you must understand the rules of the stock market, you must understand where you went wrong, and you must even start to formulate your own investment strategy.

And through continuous practice, learn to establish your own trading system, and summarize a set of feasible and effective trading strategies that suit you.

If you cannot do this, you will still need to go through the next round of a complete bull and bear market and continue to hone in it.

In the end, if you want to become an excellent investor, it is very likely that you will experience at least 3 to 5 complete rounds of bull and bear markets. If you calculate a complete bull and bear market in 5 years, it will take 15 to 25 years. .

So, Buffett warned everyone to start investing as early as possible. In fact, it does not mean that you should rush into the stock market to take risks without thinking and take most of your savings. The main meaning is that the earlier you invest in financial management, you will make mistakes. The lower the cost, the faster it is possible to achieve success and even financial freedom, but the premise is that you need to learn first to make your knowledge worthy of your wealth.