A friend buys a house when he has money. Previously, he increased his investment, and the location is in the suburbs of Hangzhou.
The basis seems to be that the country is stabilizing the housing market, similar to how the national reserves bureau collects futures. His exact words were that there is almost no downward space left. Buying in pessimism and despair is not wrong; in core urban areas, housing prices will gradually rise again with inflation. As long as real estate is not leveraged and the peak is not chased, it will eventually become a reservoir of wealth.
Smart people will move their assets from high liquidity areas to low liquidity areas; only wealth that cannot be easily sold can be retained for the long term.
High liquidity assets come and go quickly, such as BTC, ETH, and stocks.
The path to wealth is to take small risks in high liquidity areas. Once you achieve significant gains, you buy property. Smart people enter the market with small amounts of money and take large sums back home. Too many fools attempt to gain big with small investments, leading to their own ruin.
Some small investors say, 'It only dropped by 10%. Haha, do you know that property prices in core areas of India only dropped by 20-30%?' Human nature is like this; when prices start to rise, they might only buy a small room. Once they have a bit more money, they upgrade to a larger house. When they have even more money, they leverage everything they have. When the property price is 100,000, they think about 150,000, and when it's 150,000, they think about 200,000. Many people have properties worth 1,000,000 that drop by 20-30%, but I don't believe that when it reaches 100,000, they won't fully leverage it.
Oh, if it only dropped by 10%, would you with 10 million only spend 100,000 on a toilet? You would definitely go for a luxury apartment, a large three-bedroom, or a villa.
10% Haha, just a 20%-30% drop and countless people lose everything.
Human greed and fear will never change. To avoid the big pitfalls of life, you either need to be well-read, have good execution, and possess wisdom, or you have to endure hardship and learn from it. Alternatively, some wise people might help you before you fall into a pit, provided you have the ability to discern who those wise people are.
If at a card table you don’t know who the loser is, it’s probably you.