# The Fundamental Logic of Making Money

**It's not effort that determines wealth—it's proximity to the "water source."**

This is the "Cantillon Effect" in economics:

When new money is printed, it doesn't get distributed evenly to everyone. Whoever gets it first benefits; whoever gets it last pays the bill.

## Three Key Principles

**First, the monetary issuance mechanism determines wealth flow.**

Over the past decade, money was printed through foreign exchange reserves. Export enterprises and coastal regions were closest to the "water source." They got the money first when prices hadn't risen yet, giving them maximum purchasing power.

**Second, inflation is a tool for wealth transfer.**

Money gets printed, but goods are sold abroad. Domestic money increases while goods decrease, inevitably causing inflation. People inland, far from exports, didn't earn the new money but had to bear rising prices. This is an invisible tax.

**Third, you need to find the new "water source" now.**

The era of foreign exchange-driven growth is over. Now it's credit expansion, infrastructure investment, and industrial support driving growth. Wherever money flows out from, go there to collect water. Following policy beats following your gut.

## Important Caveats

**First, macro logic doesn't equal micro success.**

Knowing where money is printed doesn't mean you'll get a cut. There are thresholds, cliques, and qualification restrictions near the water source. Regular people might see the water but can't reach it.

**Second, don't ignore the weight of personal ability.**

Being close to the water source does make money easier. But without the capacity to capture it (skills, resources, knowledge), you can't catch the water—you might even drown.

Position matters. Competence matters too.

**Third, the "money printing" model keeps changing.**

It used to be foreign exchange; now it's credit, special bonds, and digital currency. Staring at old maps won't find new continents. Dynamically observe monetary policy flow rather than rigidly clinging to outdated approaches.

## Practical Advice for Those Who Want to Make Money

**First, study monetary policy, not just K-lines.**

Where is the central bank directing money (tech, green energy, small businesses, infrastructure)? Wherever credit is loose, there's opportunity. Don't bang your head against tightening industries.

**Second, get as close as possible to the "upstream of capital."**

Finance, core technology, monopolistic resources, policy-supported industries. These sectors are close to money with high error tolerance. Downstream services and purely competitive industries are far from money with severe internal competition.

**Third, hold "inflation-resistant" assets.**

Cash is fundamentally depreciating long-term. During monetary expansion cycles, hold quality equity, prime real estate, and hard currency. Don't let your hard-earned money get quietly stolen by inflation.

**Fourth, improve your "water-catching" ability.**

Even the best water source requires a bucket. Study, get certified, build networks, upgrade your knowledge. When opportunity comes, ensure you're qualified to join the table.

**Fifth, watch out for "water source depletion" risk.**

Policy changes. Industries decline. You used to profit from real estate; now you might need renewable energy. Don't bet your entire fortune on one fixed "water source." Maintain liquidity and be ready to switch tracks.

## The Bottom Line

**"People far from exports struggle not just to make money—they also bear the inflation burden."**

The reverse is equally true: People far from the current core monetary injection zones struggle not just to make money—they pay for others' prosperity.

Don't just keep your head down working. Look up at the road ahead. Don't just focus on effort. Focus on trends. Don't just watch your salary. Watch where money flows.