"From Millions in Debt to Tens of Millions in Assets: Perhaps These Points Are Worth Learning"

This article is Lu Canwei's 108th original piece.

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In the past couple of days, an old friend of mine chatted with me. He mentioned that a mutual friend we used to know has become incredibly wealthy and is now a winner in life. This friend feels lost and doesn't know what to do every day.

I told him that this person dared to take risks. He hasn't seen what others look like when they're poor; he dared to cash out millions, then was in debt for years, and finally endured until the bull market came, cashing out tens of millions. Of course, this example is not representative, as what we see is often survivor bias. Many others who did the same may have already fallen into endless debt hell.

When he advised me to enter the market back then, I thought the risk was too high, so I didn't. Later, after they made a profit, I entered at the peak, and everyone knows the outcome from there. At the end of the last bull market, he also ended up with millions in debt due to his decisions, as he didn't cash out when he was supposed to at the high.

I wonder if everyone sees this content and thinks it's another story of a comeback. However, my perspective on it now is different from before.

Resource Capability

First, we can see that he cashed out millions, but how did he do it? If it was through loans, that would be unrealistic due to high interest rates. So, it must have been through credit cards. But how did he manage to get such large credit limits? It certainly wasn't through applying with high-quality assets, as this sounds like a rags-to-riches story. If a person's capabilities are limited, then this money surely didn't come solely from him. Later in our conversation, he told me he mobilized all his relatives and friends to manage their cards for him as his funds.

This reflects his strong social skills, as he was able to make these people trust him enough to hand over their money for this high-risk venture. After all, if the money were to be lost, it would turn into debt. He isn't like Luo, who has strong resource capabilities and future earning potential. So how did he gain others' trust and make them comfortable handing over their money?

If I were to borrow a few million from so many people, I feel I currently lack the ability to do so.

Stress Resistance

If you had to bear the pressure of a few million for several years, would you be confident you could handle it? This isn't like a mortgage; at least a mortgage is a quality asset, and if worse comes to worst, the bank can reclaim the house. This is entirely net debt. Of course, he did some things to generate some income, but compared to the debt, it was basically a drop in the bucket.

From an outsider's perspective, they all seem to have strong willpower, not like ordinary people. But the reality is as we see in the news, facing family breakdowns. He has mentioned to me more than once that his family is on the verge of collapse, and he feels a bit hopeless. Even under such high pressure, he managed to pull through without giving up. I asked him how he managed not to break down in such circumstances, and he told me it was through exercise and sleep.

Doesn't stress lead to insomnia? He told me to just push harder.

Business Intuition

Back when group buying was particularly popular, he noticed that movie tickets were very cheap through group buying, so he created a bunch of accounts to buy group purchase vouchers, hoarding them and then selling them on Taobao at a slight markup. Many might wonder why others don't just buy directly from the group buying site; it's because the products have limited stock. He made his first pot of gold this way.

Later, he leveraged various credit card promotions and mileage to profit, achieving personal wealth growth. When we see information, we often only see the surface, while some people can see how to realize commercial value through it.

For example, recently with the "female sea king" case, someone turned the entire story into a PPT and sold it on Taobao, earning over ten thousand a day. In fact, most people receive information that is no worse than others. If someone had told me in the past that a certain venture was profitable, I would have thought, "You must be trying to exploit me," and thankfully, I was smart enough not to fall for it. Now my thinking is different; if you want to exploit, that's fine, but you need to let me know how you do it. Oh, it turns out it can be played this way.

Probability of Success

Even if your probability of success is 99.9%, you still have a 0.01% chance of failure. If you fall into that range, your probability of failure becomes 100%. There are many factors that contribute to accomplishing something, and no one can summarize a foolproof strategy. However, some factors can be controlled. From our friend's example, one factor is resource capability. If you can only find ten people to help you, while someone else can find a hundred, then under the same conditions, their probability of winning is higher than yours.

Of course, many will say, "If I find ten high-quality resources, like each contributing a million to me, then I have ten million. They can only contribute ten thousand, and they only have a million." But this is also a comparison of resource capability—one is quantity, the other is quality. Resources are not just money and people; they can also be other things. For example, if you can mobilize many tech experts who can provide technical barriers, or if you can obtain special qualifications, like business licenses, or if you can buy high-priced goods at a lower price in the market. All these resource capabilities will increase your probability of winning.

The so-called stress resistance is essentially about your self-emotional management, physical management, time management, and efficiency management. When others face pressure and their emotions collapse, if you can calmly analyze the problem, your probability of winning will be higher than theirs. When others refuse hospitalization and suffer sudden death, your good health gives you a higher probability of winning. When others waste most of their day on unproductive activities, while you spend that time learning, your probability of winning is higher. When others take four hours to produce one result, and you can produce the same result in one hour, your probability of winning is higher.

Business intuition is more about sensitivity to information, which is largely dependent on the volume of information you have. Following the previous example, if I haven't even opened a Taobao account and don't know how to use it, I wouldn't even think about selling on Taobao. I would think opening a Taobao store is very troublesome and might require a large sum of money. Including the idea that when you think others are exploiting, you haven't studied their business model, and you can only see the final result.

If we are at a card table together, with a deck of 54 cards, playing a game that consumes six cards per round, how do we increase our probability of winning? You would play nine rounds of the game. If you start from the first round and record the cards consumed each round, the further you go, the more accurately you can predict the cards. As the game progresses, your probability of winning increases, and by the last round, your probability of knowing what cards your opponent holds is 100%.

Perhaps we cannot control everything, but we can choose to increase the probability of the things we can control. Theoretically, this increases our chances of winning. After all, we cannot predict whether a car with a malfunctioning accelerator will come crashing towards us on the road. Of course, you could also say that the probabilities of being killed, disabled, severely injured, or lightly injured in a crash are also unpredictable.

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