Chapter 10: The Month-End Spender 10
Three minutes later, Zhao Qianqian was sitting on the floor, holding a pen in one hand and a notebook in the other, listening attentively.
Yun Luo slowly began, “What is financial management? What is investment?”
“In my view, financial management is the process of managing personal finances. For example, if you’re planning to take an exam, get married, or have children in two years, you reduce your monthly expenses now and save cash for future use.”
“Investment, on the other hand, is for increasing capital. If you can outpace the annual inflation rate, the wealth you have will not shrink.”
“To save more, you either need to increase your income (find new sources of income) or reduce your expenses. But there is a limit to how much you can cut, otherwise, your quality of life will deteriorate.”
“After working for a certain number of years, you will hit a ceiling in your career and won’t be able to get promoted. In other words, once you reach a certain age, your income will not increase significantly just by sticking to your primary job.”
Zhao Qianqian nodded in agreement, “That’s true. In the past two years, my position hasn’t changed. Every year, my base salary increases by 100, which is barely noticeable.”
A 100 yuan increase in base salary—what does that mean? It’s less than a 3% increase each year, which can’t even keep up with inflation.
“If you want to increase your income, you either need to do side jobs after work or learn about investment,” Yun Luo continued.
“People have limited energy. After eight hours of rest, even if you use up all your remaining time, you can only work for 16 hours.”
“Therefore, you need to learn how to make money work for you.”
While diligently taking notes, Zhao Qianqian interrupted, “I’ve seen this in finance books. If there’s passive income, you don’t need to spend too much time or effort, and you don’t have to actively manage it—you just receive the income automatically.”
“Correct,” Yun Luo nodded slightly, “Rental income from real estate, dividends from stocks, bond dividends, and even interest from savings all count as passive income.”
“If you could receive a stable 10,000 yuan of passive income every month, then even if you lost your job, you wouldn’t have to worry about your family’s finances.”
It sounded quite tempting, and Zhao Qianqian admitted that she was a bit moved. But…
“Investment carries risk, enter the market with caution,” she murmured the mantra, trying to stay calm.
“Not investing is also risky, as there’s the potential erosion of family wealth,” Yun Luo said.
Zhao Qianqian: “……”
The more she learned, the more she realized that life was difficult.
When she had only a small amount of money, she never had to worry about such things. The more money she had, the more she worried about its devaluation.
“After buying a new house and renovating it, there should still be some money left from the sale of the old house, right?” Yun Luo asked.
Zhao Qianqian nodded, “I have exactly 300,000 yuan left, and I’ve invested in a three-month fixed-term financial product.”
“The commercial properties around the residential building are not expensive. If you have the opportunity, you could buy one,” Yun Luo gave his final piece of advice.
Zhao Qianqian showed signs of hesitation.
Before making any investment, ordinary investors usually undergo a risk tolerance assessment.
The levels range from low to high: A1 (Conservative/Cautious), A2 (Stable), A3 (Balanced), A4 (Aggressive/Active), and A5 (Radical).
Zhao Qianqian had taken the test, and she was A2.
She could only buy lower-risk products, where the probability of losing principal is very low, and the likelihood of not achieving expected returns is also very low.
Buying commercial properties was not part of her plan.
In addition, the system never says things like “You’ll definitely make money.” Just the thought that the commercial property might end up being a bad investment made her feel uneasy.
“Your life, your decision.” Before the sentence was finished, the suited figure disappeared.
—
【Side Story】
Five years later.
It was once again the end of the year, and the colleagues gathered together, gossiping.
“I heard that the company is doing poorly this year, and the year-end bonus is smaller than usual.”
“Where did you hear that? Is it true?”
“The finance department accidentally let it slip. It should be true.”
“In previous years, the year-end bonus was a little over 10,000, but this year it’s less. How much is it? 9,999?”
“Stop joking, let’s talk seriously.” A male colleague spoke worriedly. “I have a mortgage to pay, and I’ve been looking forward to the year-end bonus all year to buy something big for my family. If the bonus shrinks, how are we going to manage?”
“My kid’s in kindergarten, and he’s attending training classes. We’re also waiting for the money!” Another female colleague chimed in.
“I’ve already made my shopping list, just waiting for the money to arrive.” Xiao Xu, a recent graduate, said with a mix of anticipation and anxiety. He had just joined the company and had no idea how much a newbie’s year-end bonus would be.
Among everyone, only Zhao Qianqian remained calm. She quietly listened to the conversation, with no trace of anxiety on her face.
Xiao Xu noticed her calmness and curiously asked, “Sister Zhao, aren’t you worried?”
Before Zhao Qianqian could respond, someone spoke bitterly, “Why is she in a hurry? She’s lucky, bought a commercial property in the northern part of the city before the prices went up. Now she just sits and collects rent. Even if she’s fired, she doesn’t have to worry about food!”
“The north?” Xiao Xu’s eyes widened. “In recent years, the city government has been developing it heavily. The property price there is 18,000 yuan per square meter, almost catching up with the city center! I heard the commercial area is especially bustling.”
“Yes, a 20-square-meter shop rents for 4,000 yuan a month, and there are plenty of people fighting to rent it!” The person spoke with growing envy.
Zhao Qianqian modestly replied, “It’s just good luck.”
“A few years ago, a friend recommended it, saying the north would likely develop in the future. The property prices were still low, so it was worth buying. I believed it and bought a small shop there.”
“Who would have thought that after five years, the north would develop so well? If I had known, I would have sold my pot and bought a few more.”
“Ah, if only I had a friend like that,” a female colleague sighed. “After having a child, you really understand how much money it burns. With both of us working, our wages just don’t cut it!”
A male colleague added, “The worst part is, after years of work, my salary hasn’t gone up, and it even seems to be going down…”
The group became increasingly bitter, almost yelling, “This lousy company! I quit!”
But in reality, their salaries were still much higher than average in the city. If they left, the salary in a new job would likely be lower than what they currently earned.
So, while they were dissatisfied with the reality, they felt powerless to change it, and eventually, they could only stew in frustration.
Zhao Qianqian patiently listened to her colleagues’ complaints but rarely spoke up.
No one knew that she didn’t just own one commercial property, but two.
After the system disappeared, trusting Yun Luo, she gritted her teeth and bought a small commercial property.
At that time, property prices were still low, with commercial space priced at 13,000 yuan per square meter, so a 20-square-meter shop only cost 260,000 yuan. Even with taxes, it came to just 270,000 yuan.
After that, she continued her life as usual. She saved money in a currency fund when she had extra, and read more books in her spare time.
At first, the shop had its contact information displayed, and it took three full months before anyone contacted her about renting it. The rent wasn’t high, only 10,000 yuan a year.
The annualized return rate was just 3.7%. If the three months of vacancy were included, the rate would be even lower, almost the same as a currency fund.
Zhao Qianqian just considered it as money stored in the bank and continued living her stable life.
A year passed.
The next year, the tenant proactively proposed renewing the lease and even offered to pay 12,000 yuan for the rent for the next year.
At that time, the residential building wasn’t very populated, and the area wasn’t very busy. Considering the vacancy period if she changed tenants, Zhao Qianqian agreed.
By the time summer arrived, the nearby shopping mall launched a grand promotional event, running for seven consecutive days, and instantly ignited the area’s popularity!
Soon after, the government announced an expansion of the subway system, with new entrances and exits planned near the mall.
The property prices in the northern area soared rapidly, as if they were launching like a rocket.
Zhao Qianqian enjoyed the benefits of renting out her shop, and with enough funds for a down payment, she decided to take out a loan and buy another one.
It was still a 20-square-meter shop, still in the same area, but the only difference was the price.
A year and a half ago, she bought it for 260,000 yuan. Now, a year and a half later, the price had risen to 340,000 yuan, an increase of about 30%.
Zhao Qianqian thought to herself: the annual rent was 12,000 yuan, which gave a return of around 3%-4%, similar to a bank deposit.
Normally, real estate prices tend to outpace inflation. Buying a commercial property was far better than keeping the money in hand and letting it lose value.
Then, by the end of the year, the government introduced a series of policies to further develop the northern area!
Countless businesses rushed in.
Property prices kept climbing.
Whether for investment purposes or personal use, the residential buildings were quickly sold out.
At first, Zhao Qianqian thought the 34,000 yuan price for the 20-square-meter shop was too high and hesitated. But by the end of the year, several people offered 380,000 yuan, hoping she would sell her shop!
After a little more time, the price reached 400,000 yuan.
Thinking she was too cautious and didn’t dare invest in other ventures, Zhao Qianqian ultimately decided not to sell and kept the shop to continue collecting rent.
It turned out that this decision was the right one.
In just a few years, the shop’s rent skyrocketed from 12,000 yuan to 48,000 yuan, almost matching her salary.
To put things in perspective, her monthly salary was around 4,000-5,000 yuan, and her year-end bonus exceeded 10,000 yuan, making her annual salary after taxes about 60,000 yuan, which was considered a high salary in this city.
But with the right property, there was no need to worry about anything. All she had to do was raise the rent and renew the lease when the contract ended, and the rent would be directly deposited into her account. It was much more relaxed than working.
Although one of the shops was bought with a loan, the monthly payment was 3,000 yuan, and the monthly rent was 4,000 yuan. The rent alone covered the mortgage, and there was no need for extra effort.
Thus, while others struggled as they aged, Zhao Qianqian found her life growing easier and easier.
After she became more financially comfortable, Zhao Qianqian could even give her mother 2,000 yuan every month, allowing her mother to eat, drink, and enjoy life without having to struggle or pinch pennies anymore.
“Can you… lend me some money?”
The voice interrupted Zhao Qianqian’s thoughts. She turned around and was surprised to see it was Shen Nianzhi.
Ever since Zhao Qianqian had told Shen Nianzhi that she was in debt and needed to save money to pay it off, Shen Nianzhi hadn’t approached her again.
At that time, Zhao Qianqian finally realized that they were merely drinking buddies. They only reached out to each other when it came to eating, drinking, and having fun, but otherwise, they never contacted each other.
Honestly, after cutting ties with Shen Nianzhi, Zhao Qianqian felt a great sense of relief. There was no one to whisper temptations in her ear, no one to lure her into spending money.
It was precisely because of those years of frugality that she had been able to save enough money to take out a loan and buy a second shop, otherwise, she wouldn’t even have been able to afford the down payment!
Her thoughts wandered for a moment, and she saw Shen Nianzhi biting her lip, her voice hoarse. “I’m struggling recently and need to borrow some money… not too much, just ten to twenty thousand is enough.”
“You’ve already gotten married, and you still haven’t prepared an emergency fund?” Zhao Qianqian was somewhat surprised.
Shen Nianzhi lowered her head, looking embarrassed.
In her younger years, she had lived extravagantly and enjoyed life. But now, as she grew older, the drawbacks of that lifestyle were becoming apparent.
First, it’s easy to go from frugality to luxury, but difficult to go from luxury to frugality. Once a habit is formed, it’s hard for her to control herself and cut down on spending.
Second, among her peers, those with similar financial backgrounds thought she spent too much, while those with wealth looked down on her. As a result, after many failed relationships, she ended up meeting her current husband through an arranged marriage at the age of 30.
They had originally agreed that the man would pay the down payment, and they would use their joint savings to pay the mortgage. But after getting married, she found out that a third of the down payment had been borrowed…
Having already received their marriage certificate, they couldn’t divorce. So, the young couple had to scrimp and save together to pay off the debt.
Recently, one of the creditors had been pressing them for money. They scraped together everything they could, but still had a shortfall of more than 10,000 yuan. After asking around, no one had spare money. With no other choice, she turned to Zhao Qianqian for help.
The older employees in the company all knew that Zhao Qianqian was lucky. Not only had she bought a shop when property prices were low, but she also married a wealthy husband who was passionate about buying real estate.
Zhao Qianqian owned a shop, and her husband had one too. It was a larger storefront on a street corner. They also had a new 120-square-meter three-bedroom apartment, all paid for in full.
The couple’s financial situations were similar, and their values aligned. They married less than six months after meeting.
Many people joked that Zhao Qianqian only worked because she had nothing to do at home, otherwise, she would have stayed at home as a full-time wife.
Shen Nianzhi couldn’t understand it. At the beginning of their careers, they were both in similar situations. How had it turned out that after a few years, one was in the sky and the other was in the ground?
Seeing that the other person didn’t speak, Zhao Qianqian sighed to herself, “When my year-end bonus arrives, I’ll transfer 10,000 yuan to you.”
“Thank you,” Shen Nianzhi’s voice was very low. “When I’m financially better off, I’ll pay you back immediately.”
“Okay,” Zhao Qianqian casually agreed.
Once the money was given, she had already mentally prepared herself that it might not be returned.
The reason she helped Shen Nianzhi wasn’t out of old feelings, but rather as a way to accumulate good karma.
She had always felt that the greatest luck in her life was encountering a system called “Yun Luo” when she was 26 years old.
This stroke of good fortune, granted to her by the heavens, was something she wished to repay by doing good deeds for the rest of her life.
—
The author has something to say:
Reader’s Finance Knowledge A:
Medical insurance is divided by both illness and person, and reimbursements aren’t fixed. Older individuals will usually get a higher reimbursement. My grandmother had surgery two years ago, and the insurance covered over 90%. However, some payments are deducted at the time of payment, and others require submitting materials for reimbursement afterward.
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Reader’s Finance Knowledge B:
The younger you are when you take out insurance, the better. The premiums are lower, and the coverage is higher. Otherwise, for the same products, the premiums will be higher and the coverage lower, and premiums for men tend to be higher than for women.
Before buying insurance, carefully read the policy details, including the coverage period and the number of years you need to pay premiums. Once you buy it, don’t cancel it casually, as the refund value will be based on the current value, which is usually very low!
If you have a history of hospitalization, make sure to provide supplementary disclosures, or your claims may be rejected or deemed as fraudulent.
When claiming, pay attention to the deductible. Many policies require a deductible of 10,000, meaning any expenses below that aren’t reimbursed. If it’s above 10,000, after social insurance has covered it, commercial insurance will reimburse the remaining amount. Always keep the receipts and make sure they’re stamped with the official seal.
Also, when buying insurance, remember to designate a beneficiary, and it must be a direct family member: spouse, parents, or children. It’s recommended that after marriage, you don’t change your household registration. A marriage certificate serves as proof, but nowadays, it really has come to the point where you need to prove your father is your father.
—
[Countless examples prove that anyone who promises a guaranteed profit is a scammer.]
[The classic case: P2P platforms claiming they are risk-free and as safe as Yu’ebao (I will write about this in detail later).]
[The house prices mentioned in this chapter are from several years ago and are no longer relevant.]
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Author’s Educational Note:
There are two main uses for savings:
1.Emergencies.
2.Taking advantage of investment opportunities when they arise.