Buffett said:
Therefore, Buffett warned investors not to borrow and sell securities on many occasions. Buffett said, "If you are smart enough, you don't need to raise money. If you are not smart enough, you should not raise money. "
So many people have remembered Buffett's words: Don't borrow money for stock trading.
Moreover, some people translated him as "don't borrow money, don't use leverage" and took such words as their own investment criteria and wisdom.
I have a limited range of recognition for the former sentence. Don't borrow money for stock trading. Take a clear-cut stand for the latter sentence and don't use leverage.
Don't just look at what a person says, look at what a person does.
The book Buffett's First Bucket of Gold tells how Buffett earned his first $654.38 billion. It says:
When Buffett first entered the stock market, it was the so-called borrowing money for stock trading.
Although Buffett's company rarely borrowed money for stock trading, they used leverage to the extreme.
Borrowing money for stock trading has costs and risks, but how does Buffett use leverage? Buffett began to use leverage without cost.
These funds are mainly divided into two parts:
So, although Buffett doesn't need to borrow money for stock trading now, it's because he has much better leverage than borrowing money for stock trading.
As a financial player, how can you leave leverage?
I agree with the statement that I don't borrow money for stock trading, but I have to add some restrictions in front.
Don't blindly use leverage in unfamiliar areas, which is more reasonable.
Blind use of high leverage in unfamiliar areas and areas with low odds of winning is a road to death.
Even if you are lucky enough to make money, you will lose twice as much. People can only make money within their own cognitive range, and leverage outside the cognitive range will make you lose twice.
To say that it is possible to subvert the three views, the core way to enter a high income level is to increase leverage.
Specifically divided into three levers.
1, space bar
Practice basic professional skills and become a top professional in your field, preferably in the top 5% of the industry. At that time, resources, contacts, customers, influence and other space resources will gather around you and naturally make money.
2. Time lever
Either, freelancers, or, network celebrities, writers, from the media, etc. Make multiple copies of yourself at a time and sell them;
Or, start a business or partnership, set up a company organization, and buy other people's time to make money for you. You only have 24 hours a day. If the company has 100 people to work for you, you can work 800 hours a day according to the 8-hour system, adding 33 times leverage to the time (if all the conditions are not met, it is best to start a business).
3. Time x space lever
We should not only sell more copies of our own time, but also use money to buy other people's time. More importantly, we should make use of Qian Shengqian, the highest form of making money, to leverage time and space in the form of combined boxing with multiplier effect. Representative figures: Ma Yun, Gates, Buffett, etc.
Most of us may never reach the third category in our lifetime, but there is still a low chance of taking off when 1 or 2 has certain leverage.