Most people don't even plan for financial freedom! Financial writer's long article reveals: index investing simply cannot reverse the class

Can index investment really reverse class? The financial writer madman has given an impossible answer in the article, defining turning over as assets needing to increase a thousandfold. And calculating the market's annualized 8% return minus 2% inflation rate, growing at a rate of 6% per year, it would take over a hundred years to increase the assets a thousandfold. At the end of the article, he also summarized how to turn the tables if you want to.

To elevate oneself to a higher class, one must multiply it by a thousand.

First of all, we need to define "overturning". He pointed out that the average GNI of the poorest countries in the world is (, and the average national total income per capita is ), which is about 200 US dollars. The world's richest person earns about 200 billion US dollars a year, a difference of one billion times. Using these two extreme values as the two ends of the spectrum, the entire human race is divided into three classes, each differing by 1000 times. Therefore, as long as your financial strength increases by 1000 times, it is the class leap or overturning that he defines.

Passive investment can lead to stable wealth accumulation, but it cannot bring about a financial turnaround.

He calculated the long-term annualized return of the stock market to be around 7% to 9%, and took 8% as the average figure, with an annual inflation rate of 2% as the average. This means that index investment can counter inflation and increase purchasing power by an average of 6% annually.

Passive investment, in fact, can make investors accumulate wealth steadily and save a lot of time and effort. Like Buffett said, most active funds cannot beat the market. However, going back to the main topic of this article, passive investment cannot achieve 'class leapfrogging.' If there is a 6% financial growth every year, it will take about 120 years to accumulate wealth.