An Effective Path to Financial Freedom for Ordinary People (Sustainable, Without the Need to Earn a Lot of Money)
Everyone pursues freedom, but everyone's standard for financial freedom varies greatly.
For ordinary people, achieving true financial freedom shouldn't be about pursuing it directly, but rather about seeking it in reverse.
Simply put, the core is one thing: find a way to break free from financial constraints.
When you're no longer forced to do what you want or do what you don't want to do because of money, you're free.
This is a more suitable "advanced financial freedom" for the vast majority of ordinary people.
Achieving this advanced financial freedom is essentially about controlling your own desires and having a more profound understanding of wealth and life.
There's no absolute value for achieving advanced financial freedom, so we'll use relative values.
I believe the ability to achieve advanced financial freedom mainly depends on three elements:
The first is "possession";
The second is "expectation";
The third is "consumption".
Below, we'll discuss how to address these three elements to potentially achieve true freedom.
01. Regarding "Possessions," Make Reasonable Comparisons. People often compare what they own with others, but this comparison is often unreasonable.
Irrational comparisons lead to anxiety and distress.
If you frequently fail to make reasonable comparisons and correctly view what you possess, and what you want and what you already have are worlds apart, you will never achieve advanced financial freedom.
What constitutes an unreasonable comparison?
If I'm 32 years old and constantly think about friends in my social circle living in large villas, even though they might be 50, I'm comparing my 32-year-old self to their 50-year-old self.
That's an unreasonable comparison.
Another example is working in your hometown, a small county, and constantly comparing your monthly and annual salaries to those working in first-tier cities, or comparing your father's wealth to that of an entrepreneur.
This is also an unreasonable comparison.
If you live in a third-tier city,
measure your possessions according to the standards of the average person in a third-tier city;
if you live in a county town,
must measure your possessions according to the standards of the average person in that county town.
Don't be stuck in a third-tier city earning 8,000 yuan a month and feeling inadequate, constantly comparing yourself to classmates earning 50,000 yuan a month at top companies in first-tier cities. These unreasonable comparisons will only bring anxiety and distress.
In most cases, people follow the law of large numbers.
The environment and the people you're in largely determine the standards of that environment and group.
If you work in a first-tier city, you can compare your income with others working there, but don't do that if you're not in a first-tier city.
In terms of personal possessions, a reasonable comparison is with the standards of the general population at your level.
For example, if you own a 1 million yuan house and a 100,000 yuan car in a third-tier city, with a relatively low mortgage payment of 2,000-3,000 yuan a month, this might be the general standard for a middle-aged person in a third-tier city.
If you've reached this standard, you shouldn't belittle yourself or be overly anxious.
Of course, you can pursue whatever you want afterward, but you must know that you already meet the general standard of this place.
You must be rational about what you have and make reasonable comparisons.
02. Regarding "Expectations," One Must Be Rationally Self-Aware
I haven't achieved advanced financial freedom yet, perhaps because I haven't cultivated a state of rational self-awareness regarding my expectations.
What does rational self-awareness look like?
Everyone says, "Having a dream makes you different," or "You should still have dreams; what if they come true?" But I want to tell everyone: Dreams are not delusions.
A dream is one that truly aligns with your own conditions and abilities, one that you have the opportunity to achieve.
It's like someone saying they'll develop an app to disrupt WeChat, or someone writing a sentence with one grammatical error every three sentences, yet claiming they'll surpass me in writing next year.
These are all delusions.
One must be rationally self-aware regarding expectations.
To some extent, I haven't achieved a state of rational self-awareness regarding my expectations.
For example,
There are several villas in Beijing priced between 60 and 80 million yuan. My annual income is only 10 million yuan, yet I actually want to buy one of those villas. At my current rate of development, it would take more than 10 years of hard work to buy such a villa.
This is a prime example of the opposite of rational self-awareness; I shouldn't be pursuing that kind of ambition right now.
Having dreams is good, and having higher aspirations is also good, but the premise is that they must be within your capabilities.
You must understand that a person doesn't suddenly become rich, nor does a sudden change occur.
Becoming stronger is like climbing Mount Tai; it's a gradual ascent, step by step. You have to reach the Middle Heavenly Gate first, then the South Heavenly Gate; you have to climb the Eighteen Bends before reaching the Jade Emperor Peak.
If you currently earn 10,000 yuan a month,
and set a goal for yourself to earn 20,000 yuan a month,
that's called rationally self-aware expectation.
If you currently have 500,000 yuan in assets,
and set a goal for yourself to achieve 1 million yuan in savings through two years of hard work,
that's also called rationally self-aware expectation.
Only when your expectations are rationally self-aware can you take a step closer to advanced financial freedom.
If you can't do this, you'll never achieve advanced financial freedom. If your expectations aren't rationally self-aware, you'll always be miserable and never happy.
03. In terms of "consumption," maintain a level, don't skip levels.
We need to know how to design our consumption to achieve advanced financial freedom.
I've coined two terms: "consumption retention" and "consumption skipping."
First, you need to learn to retain your consumption level.
What does that mean?
Let's say you previously earned 10,000 yuan a month. Through hard work, you finally got a promotion and a raise, or you encountered a good opportunity that increased your monthly income to 30,000 yuan. If you don't adjust your consumption level from the 10,000 yuan monthly standard to the 30,000 yuan monthly standard, that's called consumption retention.
In other words, you earn more, but your consumption doesn't increase accordingly.
Of course, it's not permanent retention, but rather retention for a relatively short period.
My past and present practices are examples of consumption retention.
I've already reached tens of millions in assets, but I still maintain a state of "retention" in my lifestyle. I have many friends whose assets are far less than mine, but they don't think a coat costing 3,000 to 5,000 yuan is expensive, a bag costing 20,000 to 30,000 yuan is expensive, or a watch costing 50,000 yuan is expensive. I'm different. Sometimes I feel that even buying a piece of clothing costing one or two thousand yuan is too expensive.
But I think this is also a good thing. You earn more, but by moderately maintaining a certain level of consumption at each stage, money won't feel as restrictive.
This is the first state: maintaining a certain level of consumption.
Secondly, if you can't maintain a certain level of consumption, there's a bottom line: don't skip levels in your consumption.
For example.
Cola's dad loves cars. We bought him one a few years ago. Since they live as a large family in Yunnan, this car is mostly driven by Cola's brother-in-law. So I said that since her dad loves driving and we have the means, let's buy him another one.
We unanimously agreed to buy a car outright. Our initial expectation was that a car costing 70,000 to 80,000 yuan would be enough for rural living. However, the car her parents liked cost 140,000 yuan after all the fees. Actually, buying a 140,000 yuan car is quite expensive for elderly people in rural areas. But as their children, we respected their spending habits. Later, we discussed it and decided that we would give them 80,000 yuan, and they would pay the rest themselves.
What I told Cola was:
In terms of consumption, wanting to enjoy better things—better things, better food, better entertainment, a better car, a better house—that's called consumption upgrading.
But never let consumption upgrading become skipping levels.
Cola said this was her dad's last car, but I believe it won't be. The car we buy next won't be our last either.
As we upgrade our consumption, we'll also upgrade our car purchases. We might want to change cars in five years, and again in five years. We can't skip levels in this process, because if you skip a level this time, the pressure to jump to the next level will be much greater.
So, at least mentally, we don't encourage them to skip levels in consumption. Cola and I have always adhered to the principle of absolutely not skipping levels.
We're only around thirty years old; we have decades ahead of us. If we keep skipping levels in consumption, those decades will be very difficult.
Never skip levels in consumption; upgrade gradually.
It's like this: although we can afford a car worth millions now, I can buy a 500,000 car first, then upgrade to an 800,000 or 1 million car in five or six years, and then to a 1.5 million car in another five years. This is called gradual consumption upgrading.
There's a saying, "It's easy to go from frugality to extravagance, but difficult to go from extravagance to frugality," which illustrates this point.
In conclusion: It's not easy for ordinary people to become extremely wealthy, but not being controlled by money and living a more relaxed and free life isn't difficult to achieve. You just need to: Be rationally aware of your expectations of yourself; Make reasonable comparisons of what you already possess; Maintain a consistent level of consumption as your income increases; At least don't skip levels of consumption.
If you can do these things, I believe your material life won't be too difficult, and you won't be too anxious.
Because by adjusting your expectations, understanding your possessions, and designing your consumption, you've achieved a relative balance, keeping the constraints of money within a reasonable range.
A moderate amount of anxiety is good, but if you experience immense anxiety and pain, it's because what you want far exceeds what you deserve.
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