Warren Buffett said: "The most important thing about your circle of competence is not the size of the circle of competence, but determining its boundaries."

From what stock god Buffett said From this sentence, we can feel the importance of the boundaries of the circle of competence. I have learned this sentence in the past two years. When I saw this sentence for the first time, I immediately understood its meaning, but I did not absorb the truth contained in the internalized words.

In the year since I first read this sentence, I have still done things outside the boundaries of my circle of competence. Judging from my experience in the past year, I am not very satisfied with some things I have done. I attribute these things that I am not satisfied with to things outside my circle of competence, or because I don’t have a very clear understanding of the boundaries of my circle of competence.

One day last autumn, I was chatting with a friend. During this period, we talked about investment and financial management. My friend said that he had made investments in the past two years and that he had been investing in blockchain assets for the past year. I have invested in EOS and other unknown digital currencies. At that time, my friend believed very much in blockchain digital assets and only wanted to make money. As a result, in the bull market of 2018, all the savings of more than one million yuan in the family were lost. After the blockchain market crashed in 2018, the assets in my friend's account almost fell to 0, and never rose back again. Some asset issuers ran away and disappeared.

My friend didn’t know much about the blockchain project he was investing in, so he invested his money in it because he thought the project was good. It now appears that many newly issued digital coins in 2018 are no different from air coins and have no investment value.

More than a year later, when my friend told me about that experience, his expression was calm.

I remember that teacher Li Xiaolai once said that if you don’t invest in something you don’t understand, the reason is nothing more than to do things within the boundaries of your own circle of competence. My friend did not understand the digital assets he bought and did things outside his circle of competence. As a result, he lost all his family's savings in 2018.

When I was in high school, my teacher often told us in class that we should compare ourselves with ourselves, compare ourselves today with ourselves yesterday, compare ourselves tomorrow with ourselves today, and don’t compare ourselves with others. Compare classmates. To a large extent, the teacher's words require us to do things within the boundaries of our own ability circle and do things well within our own ability circle.

Stock God Buffett also said: "If you know the boundary of your circle of competence, you will be much richer than those people whose circle of competence is five times larger than you but don't know where the boundary is."