A honest and straightforward relative in a small town saved 500,000. Should they buy a house or a car?

I said: Neither. Invest in an asset with a 5% annual dividend yield. Earn 24,000 a year in dividends, reliably bringing in 2,000 a month.

In China, this 2,000 yuan means:
- Two daily rides with a 30 yuan ride-hailing service (no depreciation, fines, or scratches)
- Or renting a million-yuan apartment (no mortgage, no renovations, able to move anytime)

What is reality?
Buying a car = a bottomless pit of annual insurance, maintenance, fuel, and parking costs
Buying a house = a 30-year mortgage locking in the future, with property management, utilities, and renovations draining another 500,000

Fifty to sixty thousand is a watershed for ordinary people’s fate. The first 50,000 is the “seed”; if handled well, the second 50,000 will come naturally.

Once you fall into the consumption trap, treating the seed as food to eat, you instantly fall back into the ranks of the proletariat, with no way to turn around.

Is it better to hold assets or liabilities? That’s the only difference between the mindset of the rich and the poor.