Zhang Wuchang: Wealth Can Grow On Time.

The change in value is a cumulative change in wealth.

The market is valuable, and the wealth of society is counted into the value of assets.

Generally speaking, in the knowledge and technology developed today, the most valuable asset is knowledge assets.

However, without slavery, human resources, including knowledge, can not be regarded as wealth based on the price of changing property rights.

We can only make some approximate estimates of the expected annuity income or rent value at the interest rate discount.

If the government interferes with interest rates frequently, the estimation of wealth is more difficult.

Before opening up to the reform, assets in China generally have no market, the rental value is hard to estimate, and the interest rate is fuzzy.

The intellectual assets of invention patents and trade secrets can be bought and sold. It is very complicated.

In today's well known market economy, all assets in principle are warehouses of wealth accumulation.

Asset appreciation is a cumulative rise in wealth.

The "Nihility paradox" discussed in our last session is an important starting point for understanding the accumulation of wealth.

I pointed out that the storage of antique collectibles as wealth is only "hidden" and does not yield income or rental value.

The appreciation of the collection is the reward of hope, and the abandonment of interest is the price.

These collections are valuable not only for money, but also for a certain period of time and even for a long time.

Historical experience says that such storehouses are often kept intact, and can be the place where the wealth of the elect is accumulated.

It is the mutual demand of participants in the market, willing to bid, resulting in stubborn existence of collection warehouses without output.

I have explained the four conditions I need.

Sensitive wealth changes

If we turn to collections that we can continue to increase today, such as works of artists who are still alive, or diamonds, jewelry and so on, it is also a repository of wealth accumulation.

Here I want to add a law: the more collectibles that continue to produce, the greater the need for the collector to appreciate or enjoy the product.

You may spend a lot of money on an antique that you don't like, but it will continue to increase. You must bet on your appreciation.

This law can be explained by students themselves.

Productive assets, such as a piece of land, are the root cause of national income.

The assets of the nihility paradox are that there is no output income.

An asset warehouse without output can not exist alone. It depends on the support of other productive warehouses.

The gentlemen and ladies of the market want to buy antique collections to facilitate the accumulation of these unproductive warehouses, and to earn their income by other productive asset warehouses.

This explains the market value of unproductive collectibles and is particularly sensitive to the growth of national income.

I have said about Japan's experience.

What about China? The income of the artists who are still alive since the middle of 80s has risen rapidly, but the value of collectibles has increased at an alarming rate since the end of deflation in two.

It is hard to say how long such an increase can last. It depends on the continuous growth rate of national income and the change of interest rate and RMB value.

The most difficult estimate is that China, with a population of about one billion and three hundred million, is probably only a tiny handful of people today (two 101).

Collecting is infectious.

With more money and more appreciation of knowledge and culture, I don't know how much the collection will increase.

Being elegant and elegant is the stuff of rich people. History comes and goes to say that.

When it comes to productive assets accumulated by wealth, we can divide it into three broad categories.

First, land and property; two, enterprises or companies; three, knowledge assets.

Here is the four necessary condition for the collection warehouse mentioned in the last section. The productive asset warehouse is almost totally unnecessary.

Taking output land as an example, we do not need experts to distinguish between true and false, do not need the right amount of land, do not need enough people to ask, nor do we need to comment on what style.

Output income is sufficient support.

Of course, enterprises can do false accounts or knowledge can make false names, but these data can be checked, and there is no need to study for many years and there are experts who ask questions.

Let's talk about land assets first.

I only use simple farmland.

Simplify, let me assume that no inflation, population and income remain unchanged, and the output per mu of agricultural products is always the same.

In this way, the rent value of agricultural land will remain unchanged after the deduction of farm costs.

This rent annuity divided by interest rate (discount) is the value of agricultural land and the wealth of the people who hold the farmland.

The rental income is equal to the interest rate, that is, the percentage of the rent value and the land price is the same as the interest rate.

Now, assuming that population or income is on schedule, the expected rate of farmland revenue will increase on a regular basis, with a fixed growth rate.

In this way, the rental value of farmland will increase year by year, and the annuity income will be multiplied by interest rate after the expected rent value is discounted.

As the rental value increases every year, the discounted wealth will be higher than the discount in the first year.

The market value or wealth of the farmland increased on time.

The interest rate per hour is equal to the expected annuity income, but the accumulation of wealth rises on the assumption that the price of farmland rises on time.

This means that the failure of revenue anticipation can lead to changes in wealth, but changes in wealth do not necessarily represent expected errors - because wealth can fluctuate on time with accurate revenue expectations.

In this way, if you are sure that the property price will rise on time, but the expected increase plus the rent below interest, you will not rush to buy it.

Talking about an enterprise or a company is also a repository of wealth accumulation. The rise or fall of the stock price represents the change of wealth accumulation.

The principle is the same as farmland, but the problem here is much more complicated than farmland.

The sales prospects of new products, how to manage them, and how the government changes the law is not easy to win.

To put it simply, the price-earning ratio of a listed company's stock reflects the prospect of the market for this company.

The difference in P / E ratio of different companies or industries can be very large, and there are several different interpretations of the substantial changes in this rate.

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Knowledge is to be exchanged for life.

Last talk

It is also said that in addition to patent knowledge and secret knowledge, learning is usually an investment with low risk and high return.

The problem is that more money is not enough to acquire knowledge and knowledge.

For money, knowledge is to be exchanged for life.

Take time to give up today's income in exchange for tomorrow's income, and borrowing money to study is not a lift.

To tell you the truth, learning is hard work.

Luckily, it is an interesting gadget, but money can not be bought with the pride of learning.

I concentrated on the various aspects of learning in my "common sense of talent" - the five talk about education.

The fourth section: conclusion.

The wealth of a country is the sum of the value of all assets.

Accumulation of wealth has always been a major problem in economics.

From the perspective of "warehouse", the predecessors did not neglect the change of asset value, or neglected some important assets.

The assets warehouse, which does not yield income, is important in nihility paradox.

In addition to what I call "ancient" collection, many other assets have a "Nihility" of income to some extent, but they help to accumulate wealth.

Without considering this aspect, we can not find the equilibrium point of wealth accumulation from the perspective of income growth.

In the second quarter, we point out the main point: the output of assets alone is the repository of wealth accumulation. The rise of wealth can not exceed the upper limit of the expected discounted income of output, though the citizens are sometimes too optimistic to overestimate future income or rental value expectations.

No matter how overestimated, the rise of wealth is bound by the rising income of assets.

However, from the collection repository where no income has been generated, the rise in wealth does not have such income constraints.

Introducing the paradox of nothingness, the social equilibrium point of wealth accumulation becomes simple: after deducting different preferences, different management troubles, etc., equilibrium is the same return rate of different assets.

Assets that are not produced should be viewed from appreciation.

The returns are usually based on expectations, and the latter can not be seen or touched.

However, equilibrium itself is only a concept, not a fact.

Finding the equilibrium point is that reasoning has a complete logical structure, which means that we can introduce a verifiable hypothesis from the limited changes.

Of course, the existence of paction costs will make the analysis far more complicated, but after all, we have a complete analysis framework.

Since the end of China's deflation in two and the two decade of this chapter, the value of real estate and collectibles (including the works of the artists who are still alive) has risen very fast in the past ten years, reflecting the impressive accumulation of wealth.

The appreciation of other assets is not, or difficult to say, for example, stock market.

This brings us again to the revelation of the unproductive collectibles.

This wealth accumulating warehouse is supported entirely by a revenue asset warehouse. Its rise or fall is sensitive to changes in national income.

Unfortunately, we can not guess whether the number of collections has reached a saturation point or how much it will increase.

Or take the Emperor Qianlong.

In October of two, three Qianlong articles were sold at auction in Hongkong.

A jade seal about one trillion and twenty million; a pair of enamel bottles about one trillion and forty million; a bottle of gourd bottle about two trillion and fifty million.

According to the data provided by an expert, the market value of one of them has increased four hundred thousand times in more than 50 years - the average annual interest rate has increased by more than twenty-three percentage points.

Or the upper limit is bound by the income of other assets.

As for the above equilibrium, the assets with no return can be revalued by the market at any time, and then the return is expected to be revalued after revaluation.

Income assets are income, and we have explained that such assets can appreciate on time.

Logically, the theory of wealth accumulation can not be deduced without introducing the paradox of nothingness.

Output based assets, as a repository of wealth accumulation, have the upper limit of revenue expected to discount interest rates.

If the society only has such assets, there will be no vacancy, and the income after output will not be easy to find.

The warehouse of nothingness paradox does not exist in itself, no income discounted, and there is no ceiling for accommodating.

In any society, there are so many productive resources, and the more suitable they are, the faster the income grows. The accumulation of wealth needs the assistance of the warehouse without the upper limit.

The second section of this chapter explains that the formation and stability of the latter is conditional.