The biggest sorrow in life is that people are alive and money is gone.

Everyone wants to see his wealth increase, and no one wants to see his wealth shrink. Compared with ordinary wage earners, the wealthy middle class and high net worth people are particularly sensitive to this because of their rich net assets. So what are the common factors that will lead to the shrinking of personal wealth, and how should we deal with it?

From the classification point of view, there are some objective factors in economic activities, such as inflation, and some subjective factors, such as some misunderstandings of investors in asset management and financial planning.

First of all, talk about objective factors. Inflation is the most common cause of personal wealth shrinking. Most people think that inflation is a bad thing, because it will make their money "worthless", but fortunately, inflation does not care about poverty, but loves wealth. As long as it is the same economy, not only your money is worthless, but other people's money is also worthless.

There are many statistical measures to measure inflation, and it is difficult to accurately quantify the average situation in the past 10 years. However, we can intuitively feel the inflation rate of China in the past 10 years through the historical CPI growth rate, year-end M2 growth rate and GDP growth rate released by the official and domestic and foreign media.

In other words, if you didn't get an annualized rate of return of more than 5% in the past 10 years, you have been "losing money". Of course, in recent years, with the rapid economic development in China, the growth rate of asset prices has risen instead of falling, especially for those who bought several suites in Beishangguang, which has won the inflation.

However, what we should see is that the economic environment in the past 10 years was different from the present, and it is difficult to beat inflation by relying on the previous logic of making money. And looking around the world, investors whose return on investment can be above a certain level for a long time are also quite scarce. In the new economic environment, how to resist inflation is a problem that everyone faces.

Many articles have been written about how to deal with inflation. Simply put, in an economy with more inflation, investors should increase debt and increase leverage in their investments. Because with the passage of time, inflation will make the actual amount of debt smaller and smaller, and at the same time, the nominal price of assets purchased by borrowing at the beginning may rise rapidly, that is, it is easier to pay off debts later, assets are more and more valuable, and cash is worthless.

However, debt leverage is a double-edged sword, which can amplify investment gains and losses. At the same time, you should also consider your income growth level when borrowing money, and you should not let the debt growth exceed your repayment ability. At this time, professional investment consultants are needed to make financial planning according to different people, so I won't spend too much space here.

After talking about objective environmental factors, let's talk about personal subjective investment factors. Let me give you an atypical but well-known example: the wealth change of US President Donald Trump.

Trump's personal wealth figures are very interesting, and there have been many versions. When he declared his property according to the electoral law in 20 15, he claimed that the property under his name was 10 billion dollars, but many institutions thought that he exaggerated the income scale of the assets under his name and thought that his personal assets were between 3 billion and 5 billion dollars.

According to an authoritative Forbes survey in June of 20 18, Trump's personal net worth was $4.5 billion in 20 15. Since he participated in the presidential election in 20 16, his wealth has shrunk by about1400 million dollars, and his net worth has dropped to 3 18 dollars.

Trump, who ranked 248th on the 20 17 American 400 Rich List, has now fallen off the list.

Forbes believes that Trump's net worth has shrunk dramatically. First, Trump's property is mainly real estate and physical retail business. In recent years, it has been at a disadvantage due to the overall global economic environment. Second, Trump's personal political image as a showman has also had an impact on the business of the company under his name. The latter can be said to be purely Trump's personal characteristics, while the former is a common mistake made by investors: the types of assets held are too concentrated.

Most financial advisers often meet customers whose assets are mostly accumulated in one or two places, such as their own enterprises, real estate or stock market:

Some customers believe that no investment is as profitable as the enterprise they have mastered, and their own enterprises can completely control themselves;

In the past 10 years, the amazing rate of return on investing in China property market, especially in first-and second-tier cities, has made many investors think that there is nothing wrong with putting all their money on the house;

Although the performance of the big A-shares has always been poor, many customers who focus on A-shares are embarrassed to mention their portfolios, but not mentioning them does not mean that customers think there is something wrong with this practice. What many people say most is: "I'll just leave it, and I'll sell it when it goes up."

In fact, my own business and house are two very illiquid investments. Although stock liquidity is good, the long-term performance of A shares is obvious to all. It is said that 90% individual investors in A shares are losing money.

If your main assets are these categories, once your personal financial situation has problems, you may have to discount the property to sell it quickly; Stocks can only cut their meat and leave the market; Although your company may have bank credit to solve its urgent needs, it is unknown whether the increased debt can be repaid in time and whether it will drag down the company's cash flow.

In addition, the property boundary between the individual and the company is unclear, and the company's liabilities will in turn drag down the individual's financial situation. These are the taboos of financial management.

If you meet a responsible financial adviser, he will definitely advise you to make diversified investments and hedge the investment risk of a single category by making diversified bets on multiple asset classes. If you want to be more detailed, you can personalize and fine-tune the asset allocation ratio according to diversified allocation and your own specific situation.

In addition to subjective and objective investment behavior will affect our wealth, there are also some "invisible killers" of wealth that we should pay attention to.

For example, the division of property after marriage caused by divorce. As we all know, most celebrities and rich people are reluctant to divorce. In addition to personal reputation damage, it is also a very painful thing to be divided up by the other half during divorce.

Earlier this year, Jeff Bezos, CEO and founder of Amazon, the world's largest e-commerce company, and his novelist wife McKinsey Bezos announced their divorce. According to media reports, the couple did not sign a prenuptial property agreement. If the news is true, according to the laws of Washington State, where they live, all the property and debts they acquired during their 25-year marriage need to be shared equally, and McKinsey will probably get more than 60 billion dollars in property.

In this way, Bezos will retreat from the world's richest man to the fifth in the world's rich list, and Bill Gates (worth more than 90 billion US dollars) will once again become the world's richest man. At the same time, McKinsey, worth more than $60 billion, will surpass Alice Wharton, the daughter of the founder of Wal-Mart (worth $46.7 billion) and become the new richest woman in the world.

Interestingly, according to Forbes Real-time Rich List, Ma, the richest man in China, is worth $35.2 billion, while Ma Yun is worth $32.6 billion. In other words, McKinsey's net worth after divorce is expected to surpass the "two horses" in an instant, showing how much harm divorce has done to the rich.

When dealing with the potential risks in this area, the practice of a well-known e-commerce CEO can be described as extremely clever. In August of 20 15, the CEO announced the day before he married the wife of an online celebrity that he would only get an annual salary of 1 yuan in the next 10 year, and was teased by netizens that 10 year's salary could not buy a cup of milk tea. Objectively speaking, taking 1 yuan annual salary can mainly avoid high income tax. At the same time, the company gave him an option incentive, which means that although the CEO can't get a high salary, as long as the company's performance is good, he can get a lot of income from the company's rising share price.

But whether intentionally or unintentionally, the annual salary of 1 yuan plus the equity obtained before marriage, the CEO is equivalent to a perfect pre-marital property division, because according to the marriage law, the divorce property division is limited to the income and property obtained by both husband and wife during the marriage. That is to say, in 10 year, for every extra year of their marriage, their wives can get more 0.5 yuan in the possible divorce property division.

Of course, in the concept of China people, it is still a very hurtful thing to make a pre-marital property agreement. Your investment adviser or financial adviser is also unhappy and asks if you have made a prenuptial property agreement. I believe that with the passage of time, Chinese people's attitude towards prenuptial agreements will become more and more peaceful and pragmatic.

Finally, I have to mention that the enemy of wealth is risk. All kinds of accidents and major diseases have swallowed up a lot of personal wealth and even made people return to poverty overnight. I believe everyone has seen it:

In May 2000, the first case of falling objects in Chongqing, the victim Hao was hit in the head by a 3 kg ashtray falling from the sky. He was in a coma for more than 70 days before he woke up, but his expression and behavioral ability were impaired. It turns out that there are two companies under the name of the victim's husband and wife, with assets exceeding 10 million. But after being smashed, their business failed, their property was gone, and they owed a lot of debts. The court ruled that only 22 households suspected of throwing objects in the whole building compensated Hao 6.5438+0.7 million yuan, but until today, this compensation has not been fully implemented.

In addition to accidents, the cost of treatment for major diseases may also cause an originally wealthy family to get into trouble in an instant. I believe many people have seen the movie "Survival Desire". The cost of using new targeted drugs to treat some cancers is tens of thousands of yuan a month, and it is not covered by medical insurance. Therefore, "exchange your life for money before the age of 40, and exchange your life with money after the age of 40" is really not a joke.

Of course, accidents are unpredictable, but people can partially hedge the corresponding risks by purchasing various accident insurances. For example, it is a good habit to spend tens of yuan more on an extra aviation accident insurance every time you fly. For major diseases, in addition to purchasing critical illness insurance to offset the risk of sudden increase in expenses and sudden decline in income during illness, regular physical examination and disease prevention are also extremely important.

In short, the shrinking wealth is not only a problem for high net worth groups, but also a problem that every ordinary person may face. I hope everyone can plan ahead and make targeted plans to make their wealth increase steadily.