What is the middle class?
In first-tier cities, those with an annual household income of RMB 500,000 to RMB 5 million belong to middle-class families; in second-tier cities, those with annual household income of RMB 200,000 to RMB 2 million belong to middle-class families.
The ceiling for most of us is the middle class, and if we go up to the rich class, it is not hard work, but luck.
Taking the whole life as an example, from the front to the back, it all depends on hard work, but from the back to the front, it all depends on luck.
Therefore, the end result of most people’s lifelong efforts is the middle class. Don’t be discouraged. You will be lucky if you can hold on and not slip.
Don’t believe the dog P chicken soup on the Internet: the sky will send a great mission to the people, and they must first work hard on their hearts and minds.
The poor suffer not at all to hone their will, but because they cannot be avoided. The meaning of your lifelong struggle is to let your children stop stepping on pitfalls and avoid traps in the future.
The hard work of several generations can lead to the blooming of a generation. this is the truth.
Life is short, but there are many pitfalls. If the cognition is not in place, it is inevitable to step on the trap.
The bottom of society is already lying on the floor, and there is no room for further decline, while the middle class may be doomed if it is a little careless or takes a wrong step.
Based on my life experience, I have summed up 10 traps on the life path of the middle class, and I hope it can be used as a reference for everyone.
Trap 1: Buying Insurance
Insurance is a typical zero-sum game. The money the insurance company makes is the money you lose. A group of postgraduates and Ph.Ds who resumed diplomatic relations with the North of Qing Dynasty worked out complicated formulas just to make you unable to understand and calculate clearly. It seems that the final rebate amount is greater than your insured amount, but in fact, after calculating the interest and decades of inflation, you will lose 100%. If everyone made money buying insurance, then Pacific Insurance and Ping An Insurance would have gone bankrupt long ago.
You can still buy professional insurance such as medical insurance if you need it. After all, in case of a serious illness, there is an institution that will pay you astronomical medical expenses. But endowment insurance, an insurance that can only be enjoyed after decades, must not be bought. Let alone whether you can live to retirement, even if you live to be 80 years old, even if you get a return equivalent to 10 times the insured amount, it will still be a loss. Because at that time, you will find that the currency depreciation must be far more than 10 times. The purchasing power of 100 yuan now is not as good as 1 yuan in 1990.
Trap 2: Pursue poetry and distant places
Life in first-tier and second-tier cities is very stressful now. Some post-80s and post-90s who have worked hard for more than ten years feel hopeless and unable to get rich. Coupled with decades of mortgage repayments, they feel that life has nothing to love, and their miserable life has no end in sight.
I began to pursue so-called poetry and distant places, such as selling my house in Beijing, Shanghai and Guangzhou to open a homestay and bar in Dali and Lijiang ; I think it is to relieve anxiety, paint a cake for myself, and calm my emotions, but there is a price to pay for doing it. It’s okay to be sexually immoral, but if you really want to be sexually obscene, you have to pay.
I have three major dreams in my life: making movies, making documentaries, and writing songs and releasing albums. But it has not been realized until now. Because this is purely burning money, without a net worth of hundreds of millions, it is impossible to play at all. In addition to money, you also need to be out of production, which is only possible if you do not have a formal job.
Poetry and distant places can be seen, and life dreams can be realized, but the premise is that the first-tier and second-tier real estate cannot be sold. You can mortgage it to realize it, but you just can’t sell it. Because the real estate appreciation in the first and second tiers is independent of human will. As long as there is still a house, you are guaranteed, you can stand up, and you have a way out.
Trap Three: Buying a Villa
I have a colleague whose family income is average, about 600,000 yuan, which is considered an ordinary family in Shanghai. A family of three lives in a 50-square-meter old and dilapidated small house in Changning District. Ten years ago, in order to pursue a luxurious life in the pastoral life, they went to the outer suburbs of Fengxian Bay to buy a seaside villa. The unit price was 20,000 when I bought it 10 years ago, and it is still 20,000 now, and it cannot be sold. The average new house in the urban area of Shanghai has risen from 30,000 10 years ago to 100,000+.
If you don’t have money, pretend to be B, if you don’t have money, pretend to be rich, if you don’t have money to live in a villa, pretend to be someone.
Villas are not affordable by the medium production capacity at all. If you have 10 to 20 million, you can buy a high-rise or bungalow in the city center obediently. For the sake of face and B, buy a townhouse in the outer suburbs or stack it to satisfy your vanity.
The fastest-growing real estate properties are the luxury houses in the core sector, second-time new houses, and scarce luxury villas.
Your ultimate goal is to hold a set in the future.
Trap Four: Luxury Consumption
Nowadays, many people think that buying luxury goods is paying IQ tax, and that the quality of luxury goods is the same as that of ordinary goods.
Even so, so what?
What you need to buy luxury goods is definitely not the quality and use, but a feeling of “I can afford it, but you can’t afford it”, and a kind of self-confidence that “I can afford it if you can afford it”.
The rich don’t need to buy luxury goods, their titles, their stocks, and their mansions are enough to prove their wealth.
And only luxury can justify the wealth of the middle class.
The consumption of the bottom class is eating out; the consumption of the middle class is luxury goods; the consumption of the rich is mansions, airplanes, yachts and celebrities.
Every class has its own consumption area, no matter what kind of consumption is making a contribution to the country.
Don’t cross-class consumption, you can’t cross the class when you consume, and you can’t cross the class if you don’t consume and save money.
Trap Five: Entrepreneurship
Relying on wages, you can’t turn over in your life, this is the truth. All people who live on wages are incompetent people; all those who earn wages by physical strength and time are incapable people.
Therefore, there are only two ways to make money: first, investment; second, starting a business.
The purpose of investment is to allow yourself to have passive income, that is, after a one-time investment, there will be continuous returns for many years.
Entrepreneurship requires your continuous investment of money, energy and time.
Investment can only improve life, and only starting a business can become a rich man.
The successful entrepreneur is one in a million, so if you are not the chosen one, and you don’t have the perseverance and perseverance different from ordinary people, it is not recommended to spend all your money to start a business, especially the kind of business that sells real estate and borrows money everywhere, it is a pit of fire.
If you have to start a business, it is recommended to choose asset-light entrepreneurship, which is a service industry that mainly focuses on creativity, design, self-media, advertising, etc. and does not require a large amount of initial material investment. Do not engage in industries that are heavily invested in assets, especially opening restaurants, hotels, bars, and manufacturing industries is not recommended.
Starting a business and engaging in the real economy is a road of no return.
I used to have a colleague who resigned from the system in 2012 to start a business. In fact, it was not considered a start-up. It was a construction team boss who liked his network resources in his position for many years and was tricked out to work with the boss. Before the section chief left, he told me that he had to go out and earn a lot of money to buy a house for his son.
After working for three years, he was fired by the construction team boss in 2015. He himself said that he made a total of 1 million in three years, but no one knows how much he actually made. In 2015, he was 55 years old, unemployed and miserable at home. Later, he bit the bullet and went to our bureau chief to introduce him to a job. Now that he has retired, there is a huge gap between enterprise pensions and system pensions. When I saw him the year before last, he was very old. He said that although the system cannot be rich and powerful, it is still close to death if you go out and work alone.
Trap Six: Buying a Luxury Car
Having a car and a house is everyone’s goal, and driving a luxury car is a man’s dream. Cullinan, Bentayga, Big G, Panamera, no one doesn’t like it.
The problem is, luxury cars are not standard equipment for the middle class at all.
After all, the middle class lives on wages, and some people have some rent income and stock fund income. Once they are laid off or encounter a stock market crash, they will be in danger immediately, and mortgages and car loans will become a mountain on their shoulders.
The biggest danger of the middle class is that they will fall into the situation of class slipping at any time, and they will stop when they stop talking. They must always work hard and struggle.
There is still a big gap between the middle class and low income. When you don’t have to work hard from 9 to 5 and have a high income to maintain your sufficient life, you are eligible to enjoy luxury cars.
I can give you a formula: the price of your car cannot exceed 10% of the market value of your property. In other words, if you have a property with a total price of 10 million, it is best not to drive a car that exceeds 1 million.
I know that there are families in second- and third-tier cities who don’t have a lot of money in their houses. They just want to buy a luxury car with one or two million cash in their hands. This kind of vanity is terrible. The correct approach is to first replace the money and houses in your hands with local luxury houses, and then consider buying expensive cars after thoroughly solving the layout of residence and assets.
A car is a pure consumable, and a luxury house is where all your net worth should be stored heavily.
Trap Seven: Immigration
After the epidemic, there was another wave of immigration. It is said that many wealthy people transfer assets and emigrate. But as an ordinary middle class, don’t join in the fun.
Immigration to Europe, political turmoil, the Russo-Ukrainian war, the French riots, and the severe economic downturn in Europe in recent years, it is not a good choice to go to Europe. Immigrants to the United States, Canada, Australia, and New Zealand are severely anti-Chinese and cannot enter the mainstream society. You are a small middle class with a net worth of 10 to 20 million. If you go there, you will still work to earn hard money.
You can’t buy a luxury house in Beijing, Shanghai and Shenzhen with this little money, so why bother to go to the West?
Local tyrants and big bosses immigrate to disperse and defend their assets, which is understandable.
If you spend a little money back and forth, you will spend a lot of intermediary fees, and you may miss the rising market of domestic and foreign real estate, throw it away at the lowest point in China, and end up taking the order at the highest point in foreign countries. Looking back, you will miss another bull market in China.
If it’s less than 100 million, don’t mess around with immigration!
Trap Eight: A city with heavy warehouses
Many of my fans are local upper-middle-class wealthy people. Most of them have a problem, that is, they are very keen to buy multiple properties in the second- and third-tier cities where they live.
The awareness of real estate investment is good, but the point of ignorance is that he only buys the city where he lives and lives, and buys multiple sets of heavy positions.
In 2020, I was the first to propose the concept of future real estate market differentiation on the whole network. Sector differentiation and urban differentiation are already the general trend. The fate of different cities is predestined by God and cannot be changed.
In first-tier cities, you can invest in multiple houses; in strong second-tier cities, you can only own two luxury houses; in weak second-tier and third- and fourth-tier cities, you can buy at most one luxury house.
For extra money, you must learn to invest across cities. For example, if you already have two sets of high-quality houses in Hangzhou, then the third set can be voted for the first-tier or other strong second-tier houses such as Suzhou and Nanjing.
The ups and downs cycle of each city is different. If you have all your net worth in one city, you will not only miss the rising dividends of other cities, but it is also very likely that the city will not rise for thousands of years with the decline of the city you live in.
Eggs cannot be put in one basket, and the same is true for real estate investment. Except for the first-tier cities, which can be heavy warehouses, all other cities should be distributed.
A family with three properties in Kunming, and a young man who just graduated and settled in Shanghai, who do you think will have the most assets 10 years later?
I am more optimistic about the young people on the front line.
Trap Nine: DINK
Having children is a basic human right, and no one has the right to interfere with the number of children. In the past, I wanted to live and refused to give birth, but now I want to give birth and don’t want to give birth.
Nowadays, the pressure of life is high, the cost of raising children is high, and the consciousness of women is rising. Therefore, the proportion of late marriage and late childbearing is very high.
I never advise to have children. I only analyze the disadvantages that not having children will bring to middle-class families from the perspective of asset appreciation: 1. After the family has Dabao and Erbao, the living space needs to be larger. After replacing it with a large apartment, it will inevitably bring about the expansion of the family’s total assets, and the pressure of life will also become your motivation to work hard
. As for DINK families, they will focus more on enjoying life and being comfortable and comfortable. From the perspective of wealth accumulation and intergenerational inheritance, they will be much weaker than families with children.
2. In the future, when your child gets married and chooses a well-matched family, the combination of the family assets of both parties will greatly increase your child’s wealth and achieve a rise in class. As for the DINK family, with the gradual loss of labor ability, future wealth shrinkage is inevitable.
3. The birth rate is now seriously declining. In the next few decades, the most expensive thing is the young labor force, and what is visible to the naked eye is that in 20-30 years, young people will become a scarce resource. In the future, the huge wealth of the whole society will be transferred to the younger generation. The more young people in the family, the greater the total amount of social wealth gained, and families without children will lose the opportunity to redistribute wealth.
Trap Ten: Derailment
Marriage is the tomb of love, it is true. Married for up to 5 years, there will be only family affection without passion. Husband and wife are more like brothers and sisters who love brothers and sisters. They will love, take care of, and maintain, but they just don’t want to be intimate.
We all know that the entertainment industry is very chaotic, with divorce, cheating, sleeping with fans, and whoring, but in fact, ordinary people are the same, but celebrities pay more attention, and even a little gossip can cause a lot of trouble in the city, and no matter how much the ordinary people play, no one cares.
Art comes from life, but life is much higher than art.
Love and love are things engraved in human genes, and have nothing to do with high or low. As long as there is breath, this is an eternal pursuit.
A friend of mine went to work in Canada ten years ago when he was 35 years old. He had been married for many years in China at that time, and his children were all in their teens. He has found 4 girlfriends in Canada, including Chinese students, a restaurant proprietress, and a waiter. The key is that my friend has no money at all and looks mediocre. Later, his domestic wife also started having an affair. After returning to China in 2019, he wanted to save his marriage, but unfortunately, the deal was done and he still got divorced. After returning to China, he found several girlfriends, one of whom was very rich, and had many real estate and land in Dalian, South Korea and Thailand, but he failed to get married in the end. Unexpectedly, a Chinese student who was with him in Canada 10 years ago and 12 years younger than him contacted him earlier this year. The two have now registered their marriage in China, and the woman plans to apply for immigration for him and bring him back to Canada to settle down together.
Some people have wealth luck, some people have love luck, some people have neither wealth luck nor love luck, but they live a long life.
A man’s lifelong pursuit is money and women, but I don’t know what a woman’s lifelong pursuit is. According to female compatriots, it’s money and beauty.
If you are a proletarian and you don’t have much money, it’s okay to find more girlfriends, because you have nothing to lose. And if you are a married middle-class family, you should be especially careful about extramarital affairs, because once you are found out and you get divorced, your hard-earned tens of millions of property will be divided by half by your spouse, and your class will slip in an instant, and you will inevitably lose your reputation. Of course, if you can find a rich woman, then congratulations on your success.
There is a knife on the head of the word color, so many celebrities and officials have overturned their cars because of women this year, Wu Xfan, Li Xfeng, Cai Xkun, Chengdu holding hands…
Desire is the driving force for struggle, but excessive indulgence is doomed to perdition.
Now many young people have entered a state of low desire, but one day once you have money, your desire that has been dusty for many years will come out soon. Understand, human nature.