Starting with 100,000 yuan: How small investors can make their money work for them

As the year comes to an end, rising prices have become the most noticeable phenomenon. Egg prices increase, mortgage rates rise, and the cost of living continues to climb—these all remind us: Relying solely on wages is no longer enough; investment and financial management have become essential courses.

Many people are accustomed to putting their money in banks, unaware that inflation is silently eroding purchasing power. Instead of passively waiting, it’s better to take proactive action. If you have ### ten thousand yuan, you already hold the first ticket to changing your financial destiny.

The Core of Investing: Cognition, Choice, Execution

When it comes to investing, many think of complex financial knowledge or large startup capital. In reality, investing only requires three things: clear cognition, suitable choices, and long-term execution.

Step 1: Understand Your Cash Flow

Many investment failures are not due to choosing the wrong target but because of using money that shouldn’t be used. Invest with idle funds—money whose flow won’t affect daily life. When the target’s price drops, you won’t be forced to cut losses.

Therefore, the most important thing is bookkeeping. Treat yourself as a company, clearly knowing your monthly income and expenses, finding room to cut costs, and estimating a stable amount for investment. This process may seem tedious, but it’s the foundation for building investment discipline.

Step 2: Choose Investment Methods Based on Your Identity

Different identities face different constraints, so investment methods should vary accordingly.

Stable employees: Fixed income but slow growth, suitable for dividend-paying products (such as high-dividend ETFs), allowing monthly dividends to gradually supplement living expenses—eventually like giving yourself a raise.

High-income groups (doctors, engineers, etc.): Sufficient income, not in a hurry to extract cash flow from investments. Instead, let compound interest ferment over time. Buying index ETFs tracking the market can yield astonishing returns after 20–30 years.

Time-rich groups (students, freelancers): Can turn time into income. By gathering information and analyzing trends, entering before hot topics hype, and short-term harvesting of arbitrage—this is speculation, not investment, but it can also make money.

Investment Options with 10,000 Yuan and Expected Returns

Now, let’s look at specific targets.

Gold: A Hedge Against Inflation

Over the past 10 years, gold has increased in value by 53%, with an average annual return of 4.4%. During times of economic uncertainty and market volatility, gold’s safe-haven properties are most prominent—especially during crises like pandemics and geopolitical conflicts, when gold prices often soar.

The downside is that gold pays no dividends; all gains come from price differences. Long-term holding yields are not high.

Bitcoin: Speculation or Investment?

Bitcoin has surged over 170 times in the past 10 years. But such gains are hard to replicate—each rise is driven by new factors (exchange failures, geopolitical demand, dollar devaluation, etc.), which are unpredictable and non-reproducible.

Currently, Bitcoin faces several bullish factors: halving events, the opportunity for spot ETFs, and policy support. Short-term, it’s suitable for going long, but long-term investors should allocate at low prices and reduce at high prices. Never let Bitcoin exceed 10% of your total assets. According to the latest data, Bitcoin is currently priced at about $87,670.

ETF 0056: A Steady Dividend-Paying Choice

Taiwan’s most well-known high-dividend ETF, with a 60% dividend payout and 40% stock price appreciation over the past 10 years. Because its strategy focuses on high-dividend stocks, the expected return over the next decade is similar to the past—assets doubling, with 60% paid out as living subsidies and 40% reinvested for principal growth.

If you invest 100,000 yuan annually, after 13 years, annual dividends will reach 100,000 yuan; after 25 years, annual dividends will exceed 220,000 yuan. After retirement, combined with labor insurance and pension, you can easily have over 40,000 yuan in passive income per month.

ETF SPY: The Holy Grail of Compound Interest

Tracking the top 500 US companies, it has increased by 116% over the past 10 years, with a dividend yield of only 1.1% (even lower after taxes). Most returns come from principal growth rather than dividends.

Investing 100,000 yuan for 30 years can accumulate to 1 million yuan; if you invest a total of 3 million yuan over 30 years, the final value will exceed 12 million. Almost zero risk—as long as the US dollar remains the global settlement currency, the US will not go bankrupt, and assets will inevitably appreciate steadily.

The downside is the lack of cash flow along the way, requiring stable work income to sustain through market fluctuations.

Berkshire Hathaway: A Sustainable Arbitrage Mechanism

The company held by Warren Buffett, with a simple and replicable profit model: accumulating cash through insurance businesses, then borrowing at low interest to invest in high-yield arbitrage.

For example, issuing 0.5% interest bonds in Japan, using the funds to buy higher-yielding Japanese stocks; issuing savings insurance in the US to absorb funds, then purchasing US Treasuries of the same maturity to earn the interest spread. As long as the management strategy remains unchanged, this model can operate sustainably—even if Buffett passes away, it won’t change.

The Key to Practical Investing: Choose What Fits You

The aforementioned targets do not require large startup capital—just a few thousand yuan to start. But choice is more important than effort—no matter how good an investment plan is, if it doesn’t suit your life situation and risk tolerance, it will ultimately be abandoned.

Time is the strongest ally of compound interest. Whether choosing dividend accumulation or index funds for automatic compounding, the key is to start early, keep investing, and be patient.

Clear cognition, appropriate targets, and firm execution—these three elements together make an initial capital of 10,000 yuan enough to unlock the door to financial freedom. The dream of small millionaires and small millionaires’ wives is actually not that far away.