Daily Inspired #06

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The Topic

Learning finance and equipped with finance knowledge is essential for people who are living in the 21st century. Not saying that it is essential to know every term in finance and able to utilize different financial tools to our own advantage. However, by knowing and understanding what are the fundamental of finance, it will enable us to be more resilient in defending our hard-earned wealth and prevent ourselves from getting into scams or high possible losses.



The Learning Points

Why finance matters?

From the sharing of the lecturer from Peking University, I get to know the finance really matters. It involved most of the things that we use like credit cards, loans, savings, fixed deposit, unit trust, bonds, stocks and even cryptocurrency! There are different financial tools that we use and to be sure we use it in a clever way, we need to understand the fundamental of every tool.

To me, finance or I would say money is not evil. It is just a method of value transfer. Money which in this case fiat currency is just a piece of paper where it is commonly agreed upon the value of that piece of paper. With proper understanding, we can use what the finance institutions are offering to us, the facilities are there but not many of us are using. Plus, we may end up using those in the “black market” like getting loans from a loan shark. Nowadays, loan shark no longer presents themselves as a loan shark-like mafia, but they will have a makeover to become a professional “p2p lender” where they can instantly lend you cash without much verification. Obviously, as the lender, without equal value collateral, it is highly risky to even lend out a single cent to the lendee. With that being said, without the understanding of finance, we may not be aware that a lender would need collateral to lend someone cash, without that, it will be very fishy.

Thus, the reason for learning finance is not only about building my wealth but also filtering those scammy financial facilities made available to us.


What can I do with the knowledge?

With the right knowledge of finance, not only we can prevent ourselves from being scammed but we can retain the value of our wealth and even increase our wealth. Finance is not just about pure numbers, it is correlated to many other things like economics, social patterns and behaviours. All of these will affect the nature of finance like risk management and how accessible the facility is to the people.

Finance knowledge not only stops at the level of the individual but can be beyond an entity to a listed corporate or even a nation. The listed company will need the right strategy to structure its share structure so that its IPO can be launched smoothly. Nation will require an understanding of finance to help the people to create value for the country like pushing up the GDP. Therefore, monetary policies are also a big factor that will affect the whole board game to attain wealth.


Creating a capital machine

My personal reason to learn about finance is to create a capital machine. In other words, a machine that will work for me even I’m doing “nothing”. Like I can decide that I want to go for a one month vacation just like that without the worries of not able to meet my ends. The machine that I built would be efficient and productive enough to generate the income that can sustain my personal lifestyle as well as enabling me to further invest in more fields.

Of course, without the fundamental understanding of finance, especially a structured and macro understanding of the whole finance world, it is hard to learn from the different self-proclaimed guru that teach just a bit of “techniques” to earn but not the fundamental. That is why there are many gurus out there claiming to be able to provide the right vehicle for us to create this machine.

To be honest, after going through numerous courses, I would say that understanding the fundamental is the key. With the understanding we have, then only we can take the right action to build this machine of ours. There is no way that the gurus will sell their machine to us and let us get on board. Hence, it is all about action and continuous hard work to build the machine.


Freedom equals discipline

Another thing that I picked up from the books is that discipline matters when we are on our way building the wealth machine. There are many tempting moments where lucrative offers will present in front of us and whether or not we are disciplined enough to stay by our fundamental knowledge and continue our ways to build the machine. When we start to diverge into the sudden “offer” that is out of the equation, we may lose the overall momentum or even the half-done machine that we built with years of sweat and tears.

So I would like to remind myself about the importance of discipline in taking care of my finance as well as other parts of my life. With the right constraint, we can get the life that we want in due time.


Where I want to be? What do I want to do?

Personally, I want to be at the level where I can be financially independent. Well, it is always exciting to imagine how we can live our life when we amassed certain wealth. However, back to the previous point that I mentioned is that discipline is all that matters. As long as we stay as who we are in the beginning, standing firm on what we believe in, we will definitely lead a happy life. That’s going to be my life mantra. As of now, I’m still finding different constraints to build myself up and construct the wealth machine.

There is also a bucket list for me which I will add on things that I want to do from time to time. This is to enable me to reverse engineer a path that would lead me in achieving that seemingly impossible stuff that I listed in my list. One of the key factors of success would be understanding the fundamental of finance. Without this, I would say that I lose the “fuel generator” for this machine to run.



Inspiration

In fact, I had just signed up the online course to understand the whole finance world. I will be sharing the knowledge here on Hive blockchain which I think is going to be beneficial to many. The course is in Chinese so I will try to translate and use precise words the best I can.

Frankly speaking, having to know about this course excites me. Although I know that learning this will not instantly make me a millionaire, at the very least, it will equipped me to think like one. All millionaires and billionaires are the masters of capitalism, so I would boldly say that all of them have a thorough understanding of how finance can help them build the wealth machine.


Reference

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Record

Daily Inspired #00 - My Beginning
Daily Inspired #01
Daily Inspired #02
Daily Inspired #03
Daily Inspired #04
Daily Inspired #05

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