Love Affairs in Melbourne-Chapter 200 - 197 Some Changes (4)

Yan Dabang and his wife had officially retired. freewebnøvel.coɱ

Having proactively given 15% of their shares to their technical staff, the sale of Yan Dabang’s company did not immediately turn their savings into a nine-digit figure.

Normally, the sale of a company could fetch at least triple its annual profit.

In such a pricing case, the buyer could recover the cost in three years, and from the fourth year, it’s all profit.

However, it was a difficult time for the manufacturing industry, and a significant part of Yanlu Machinery’s profits remained as accounts receivable.

When Yan Dabang and his wife sold their company, they only set an estimate of one hundred million for Yanlu Shoe Machine.

This valuation, equal to a year’s profit of Yanlu Machinery including accounts receivable, did not follow the "industry norm" at all.

If they had valued the company at three hundred million according to the "industry norm," firstly, it might not immediately find a buyer, and secondly, the buyer could end up being cheated.

Yan Dabang and his wife’s mindset was entirely different from those who were just starting up and had not yet made a profit, but would casually slap a valuation of one hundred million on their company.

A company’s appraisal needed to be based on actual circumstances. If there were an "industry norm" used as an excuse for intransigence, it would only lead to clinging to bad stocks or finding a sucker.

When Yan Dabang and his wife were selling their company, they did not consider the "industry norm." After properly arranging for their technical staff, the couple found a balance among their own psychological pricing, the future development of the company, and ensuring the buyer was not at a loss.

After selling the company, Yan Yan’s family’s account still only had several tens of millions, a bit away from the title of millionaires.

Two months earlier, when Yan Dabang and his wife sold the piece of land in the city center owned by Yanlu Machinery, the Yan family’s wealth dramatically increased.

Even calculated on a per capita basis, every member of Yan Yan’s family was already a millionaire.

Yan Dabang and his wife were not new to seeing and managing money; apart from wealth management through the bank, they had also been very keen on buying properties.

But compared to their current wealth, what they had before was minor.

With more money came the problem of how to make money from money.

Previously, Yan Yan’s family’s money was either in flux or in accounts receivable; any money saved was used to buy properties, and the funds in their bank accounts were always quite limited.

Yan Dabang and his wife had never encountered the issue of how to manage money sitting in the bank.

Having money in the bank is what people with not much money would do.

Bank interest, for wealth growth, is practically negligible.

With money in the bank, how could the "little bit" of interest keep up with the "big guy" of inflation?

If someone is constantly thinking about how to appreciate their bank deposits or considering what kind of capital-guaranteed financial products to invest in for a bit more return, it indicates that their deposits are not substantial.

When you have a few million in the bank untouched, various wealth managers from banks might call you to inquire if you wish to buy their financial products.

When you have tens of millions in the bank untouched, experienced wealth managers from the bank will certainly tailor the most suitable financial product combination for you, and at the same time, more high-end private banks will start to reach out to you.

When you have hundreds of millions in the bank untouched, multiple private banks will assign personal advisors to help you make money all over the world, designing the best plans for you, fearing that they might lose a "heavyweight" client by any small oversight.

This last category of people is also exceedingly rare, even for banks.

After decades of economic boom, in China, a person with hundreds of millions is no longer a rarity.

But normally, even someone with assets worth hundreds of billions wouldn’t necessarily have that much cash in their personal account.

Now, Yan Dabang and his wife belong to this exceptionally rare category.

Suddenly becoming such wealthy people, Yan Dabang and his wife really didn’t know what to do with the money at first.

More importantly, when the money from the land sale was credited, Yan Dabang and his wife were already in Melbourne, so objectively speaking, they hadn’t had the chance to handle their newfound wealth.

It wasn’t until various private bankers started relentlessly reaching out that Yan Dabang and his wife realized they were now on the wealthy elite list chased by private banks.

Industrialists are like that, many only know how to create value through diligent labor and are not keen on playing the money game.

Behind the seemingly glamorous real estate developers lay heaps of debt.

For those in real estate, appearances are paramount, and since they spend the money from banks and shareholders, how can they not be lavish?

True invisible billionaires are produced in industry.

Perhaps because they are too invisible, many "factory managers" maintain a consistent style of frugality over the years, hardly resembling the wealthy at all.

There are "factory managers" who don’t change their cars for ten years, and over time, they might not even consider themselves rich.

How do rich people who don’t run businesses increase their wealth?

Yan Dabang and his wife, who had never been in the circle of the rich before, had indeed never thoroughly contemplated this question.

Yan Yan, being a designer, was even more detached from these matters.

Every private bank that came knocking claimed that their asset allocation plans were the best.

But how do true billionaires handle their "idle" funds?

This question really needed to be asked to someone experienced with the wealthy.

So, who in the Yan Family had seen the most billionaires?

It had to be Yan Ling, who graduated with an MBA from Wharton Business School.

Those who got into Wharton to study for an MBA, aside from a few "poor kids" who relied on their own abilities, most of their classmates were either rich or noble.

The phrase "poor kids" also perfectly described Yan Yan’s cousin.

Compared to those with real heritage, Lingyan Shoe Industry, owned by Yan Ling’s family, was hardly significant.

Yan Ling would absolutely pay attention to anything concerning Yan Yan’s family.

"Poor student" Yan Ling, upon receiving the "directive," consulted with a Trust Fund Baby, born with the "Diamond Key." (note 1)

note 1:

In the combination Trust Fund Baby, Trust Fund refers to a family trust fund, and the addition of Baby implies being born into immense wealth, inheriting a family trust fund from birth.

Trust Fund Baby and China’s second-generation rich are somewhat similar terms.

Most of the time, it carries a slightly derogatory sense, often hinting at someone being wasteful or lacking in ambition.

Trust Fund Baby often refers to second or third generations who live solely off their family’s trust funds.

However, not all second-generation rich are idle, and likewise, some Trust Fund Babies are very diligent.