Making a lot of money when young, how to use it wisely and avoid pitfalls.

Young people who encounter great wealth actually find it easier to go astray than others. It's not about the money itself, but because the money comes too early, preventing your mindset, experience, relationships, and judgment from keeping up.

The following eight points are presented without exaggeration or sensationalism; they simply clarify the reality.

1. First stabilize your cash flow, don't rush to upgrade your lifestyle.

When you come into a large sum of money that can change your life, the easiest mistake to make is to immediately upgrade your lifestyle: live in a better place, eat better food, buy more expensive things, and do things you previously couldn't afford.

But you need to remember one fact: income can change, but lifestyle habits do not. Once your standard of living has been raised, it will be very painful to adjust it downwards.

So the first step is not to spend money, but to turn your cash flow for the next few decades into a "steady state". This will ensure that you won't panic about money in any situation.

The real risk when you are young is not buying the wrong things, but rather growing up too fast to go back.

2. Buying a house can weaken your future flexibility (especially noticeable when you're younger).

When you have a lot of money in hand, buying a house seems very reasonable, but the real cost is the decrease in mobility. Renting allows you to change cities, environments, and lifestyles at any time. Your life, opportunities, social circles, and career can all move with you.

But once you buy a house and take on a mortgage, your life will become:
Many decisions have to consider "what to do about the house"; people are hesitant to change industries or cities, and further education or changing directions are all affected by the mortgage, making living areas become fixed.

When you haven't set the direction of your life yet, nailing yourself down in one place in advance incurs very high implicit costs.
Only when you are really sure where you want to stay long-term, your career is stable, and your future direction is clear, buying a house will be comfortable.

3. A car is a signal of "external credit" and "social status".

A car is not for show, but rather a part of how you "appear". In reality, most people won't carefully listen to you explain your abilities, projects, or experiences; they will only see where you appear and in what state you appear.

The car here plays a role of "external credit": whether you are stable, whether you are reliable in your work, what circles you are active in, and whether your lifestyle is consistent. It's not about you buying a luxury car, but rather about avoiding giving others a wrong impression of you.

A stable, reliable vehicle ensures you won't lose points in various situations. However, you must never compromise cash flow for the vehicle, as that would be counterproductive.

A car is a tool, not a declaration. A good car is one that allows you to move smoothly.

4. Large assets must be managed in partitions: security, growth, and capability enhancement lines.

Mixing large amounts of money together can easily cause you to lose direction. After dividing it into three categories, you will have a clearer understanding of what each amount of money is doing.

(1) Long-term secure assets (lifesaver)
Function: Allows you to not panic even if you don't work for years.
Examples: cash, gold. The role is "stability", not "growth".

(2) Long-term growth assets (thicker)
Function: Make you stronger in ten years than you are now.
Examples: Bitcoin, gold, long-term index.
Do not chase short-term rewards, only pursue time.

(3) personal capability upgrade budget (upper limit)
Function: Make you more valuable.
Examples: language training, physical training, skill learning, equipment tools, going abroad, upgrading social circles, external factors. This area is often misused, but it has the highest long-term returns.

After dividing your money into categories, you will be calmer, more clear-headed, and less likely to spend recklessly.

5. The "opportunities" others talk about are basically not suitable for you.

When others know you are young and wealthy, you will suddenly receive many "opportunities".

The reality is:
A truly good project won't suddenly come to you just because you happen to have money.
Especially the following types, you should be particularly vigilant:
"Guaranteed Profit"
I know people on the inside.
"If you don't invest now, you won't have the opportunity later."
"Brothers, let's all get rich together"
"Guaranteed capital return and dividends"

Young and wealthy people often stumble not because of the investment itself, but because someone else's words pull them into a situation that originally had nothing to do with them. Caution is a form of protection for one's own wealth.

6. Preventing "cognitive inflation" is the most important thing to protect large sums of money.

The easiest problem that arises when you acquire life-changing wealth at a young age is not external risks, but rather that you begin to "misjudge yourself."

may mistakenly think:
You understand the market, you can manage the risks, and your success is due to your ability, not the cycle. You can't go back to the past, but just because money has arrived early doesn't mean that your mindset has matured early.

Those who can truly keep their wealth rarely treat their first big money as a "proof of their invincibility." Instead, they are more cautious because they know:
Good luck doesn't come every time, but one mistake is enough.

7. Emotions are the easiest place to derail after a large sum of money arrives.

When you are young, free, and wealthy, there is a significant information asymmetry in interpersonal relationships.
It's hard to tell: whether the other person is looking at you, the lifestyle you offer, or the resources, sense of security, and opportunities behind you.

This is reality.
What really needs to be judged is:
What is the core of this relationship?

If the other party is willing to walk through the low points with you, that's emotion; if the other party only wants to appear during your highlight moments, that's exchange; if you know it's exchange but fantasize it as love, that's self-deception.

If you know it's an exchange and rationally understand that you are a tool, then you can choose to continue.

Money cannot buy true feelings, but it makes it harder for people to discern true feelings. The most dangerous thing in youth is not being deceived, but taking an unequal relationship as a fate arrangement.

If you don't protect this part of your emotions well, what can be destroyed is not money, but judgment, as well as your entire life trajectory.

8. The best thing to buy with this money is an option, not a shackle.

To tie all of this together, there's really just one sentence:

When you come into a huge fortune at a young age, the most worthwhile thing to buy is not things, but freedom. The essence of freedom is not what you can spend, but what you can:

Reject bad people, reject bad collaborations, reject unsuitable opportunities, choose the city you like, choose the things you want to do, stop to learn at any time, change tracks at any time, start a new life at any time.

You want to turn this money into space, flexibility, confidence, surplus, and the future. Not into pressure, persona, fixed costs, and burden.