Ordinary People Should Avoid Long - term Investment When Making Money

Why Focus on Profit and Cash Flow

For ordinary people who want to make money, besides choosing low - cost and light - asset projects, there are two important points. First, they should think about how to make money from the start, and second, they need to consider profit.

I don't deny the value of long - term investment, especially investing in oneself and personal growth. Sometimes, it's hard to see the results in a short time because personal growth and change take time. It could take half a year, a year, or even three years or more.

For example, many people don't even realize that investing in their health and energy is also valuable. Only when they lose their health and their energy declines do they realize how precious health is. A single visit to the hospital can cost hundreds or even thousands of yuan, and it takes a long time to earn that money back. In this sense, health is equivalent to money.

We can quantify aspects like health, energy, and personal qualities, which are not easy to change or compare. For instance, if you keep yourself healthy and energetic, you'll visit the hospital only a few times a year, saving a lot of money and reducing the occurrence of various diseases. If you stretch the time to 10 or 20 years and then average it out per year, you can roughly calculate how much money you've saved. That's the value or return of what you're doing now (paying attention to health, etc.).

However, this is different from how ordinary people make money. Ordinary people must focus on profit and cash flow. If they don't, they may be losing money, or there may be something wrong with what they're doing.

I've learned this the hard way. You might think it's an investment, and in a way, it is. But it doesn't conflict with your current goal of making money, getting cash flow, and earning profit. In other words, they can go hand in hand.

The Pitfall of the "Equipment Party"

There's a group of people called the "equipment party." They gather all kinds of equipment before even starting a task. Whether it's for sports, photography, or video - making, they often spend tens of thousands of yuan on equipment.

In most cases, these equipment end up gathering dust. They may not be used much after purchase, and people may lose interest later. It was just a momentary impulse. Or they may try for a while, find they can't continue, and then resell the equipment.

They have their own reasoning. They think that if they don't invest enough resources in something, they won't be very interested, won't want to spend much time on it, and may even underestimate it. Only when they invest enough resources will they feel they have to persevere because of the so - called sunk cost.

It's hard to say if this idea is right or wrong. But it has a drawback: it's easy to cause significant losses. Also, people may be reluctant to abandon wrong decisions because of the sunk cost and become overly stubborn, thinking they must prove their choice was correct.

The Importance of Low - cost Trial and Error

Making money and starting a business are all about results. Sometimes, what you do doesn't make logical sense or doesn't follow market rules, and you won't get good results. That's an objective fact. There may be an element of luck, but in most cases, you need to follow the rules, at least the rules of the market. The market may not be fair, as there's no absolute fairness in the world.

It's really hard to decide whether to invest a little or a lot at the beginning. If you invest a little, it's easier to cut your losses in time. But if you invest too much, you may be reluctant to give up even when you realize something is wrong.

Personally, I prefer low - cost trial and error. Before you try, get results, and verify something, it's hard to tell if it will succeed or if it's suitable for you. So, you have to try it yourself, go through the process, and see for yourself. At this stage, since the cost is low, you can more calmly decide whether to increase your investment. But if you invest too much at the start, it may be like stock trading, where you keep adding more money.

Ordinary people have limited resources for trial and error. You may only have a small margin for error. In this case, you need to be extremely cautious when making big bets and not do it easily.

Some people have a large margin for error and can invest a large amount at once. But if you only have a small amount, you can only invest a little bit to give it a try.

In conclusion, the low - cost, light - asset business model is suitable for ordinary people. Try on a large scale with low cost at the beginning and don't make big bets easily. Pay attention to profit and cash flow, continuously test and verify, and then gradually increase your investment after you're sure it's feasible. Investing too much at the start can seriously affect your subsequent judgment and may interfere with your future choices because of the sunk cost. There's a saying, "Sunk cost is not a cost." It's hard to put into practice, but you really have to try.

Daily Reading & Writing by Xiaolu 06/21/2025 [Day 656]