What is personal finance ?
[ Opening ] in the end what is personal finance it? Personal finance is through proper management of financial resources to implement a process of personal life goals are unified as a co-ordinated program designed to achieve the overall financial goals . This is a very long , there are three core meanings: First , financial resources, to make it clear what their financial resources ; second , life goals, to their own life goals have a clear understanding ; Third , there must be a series of harmonization the plan , to ensure that all programs do not conflict , are able to achieve coordinated . Core content on include insurance planning, investment planning, education planning , income tax planning , retirement planning, estate planning . With cash flow management integrated with all the plans , coordinate all plans and programs so that all are able to meet your cash flow , which is the core of personal finance .
So personal finance should be how to do it ? Divided into five major strides :
[ First ] to develop financial goals. This should be considered in many aspects , the first to quantify the financial goals , such as buying a house, which is not a financial goal ? It’s not . Buy a house worth a price , to buy a house after three years , or next year would buy a house, this is a financial goal , that is to quantify , to have a concept of time. Meanwhile , you can imagine , living in this house would be what kind of situation , which helps to achieve your desired goals . The real financial goals is a quantitative , time-bound targets.
[ Second ] review their asset position . What is the review of asset condition ? Take a look in the end is how much wealth you can manage . One is how many assets you have in the past , then you will have much of a future income , which belong to the problem of how much money to manage areas . Look at your assets are not in line with their own needs and your balance is not reasonable , is not it also could use some financial leverage to make their financial structure is more reasonable , this is a review asset position .
[ Third ] understand their risk appetite. Some say he is a very conservative person , someone would say he is a very aggressive person, how can you properly evaluate your risk appetite it? There are three methods , we must first consider your personal circumstances , there is not married , have no dependents of the population , and how much revenue expenditure . If you have a child , you are still very aggressive investment behavior at very high risk , only that you do not have a clear understanding as to the burden of family responsibilities have not the same . Second, consider the trend of investment. For example, you are very good at the equity side , you are in a very aggressive investment in people , and so on . Finally, we need to consider the orientation of personality . Different personalities in the face of some of the things, will make different choices , which also determines the character of the behavior of the people there in the financial process.
[ IV ] a reasonable allocation of assets. This is a strategic asset allocation , asset allocation in the state to make very rational , not today suddenly heard a friend say that a stock is very good, put all the assets are placed in stocks. First, the assets should make a good assignment , for example, from a strategic point of speaking, take only 30% of investment assets for stocks , no matter how people say , is fixed at 30%, 20 % of its assets in the bank , which is a strategic asset allocation .
[Fifth ] investment performance management , adjusted according to changes in the market .
[ Also ] reasonable arrangements pocket money
Only gold that without adequate consideration for personal finance , it may have adverse consequences at three levels . The first level , for a variety of disasters that may occur in individuals not provide adequate protection , that is to say , now ‘s the ideal life is built on the revenue can be maintained under normal circumstances , if the income interruption or that any accident , such as a house fire All would have to waste a plan ; second level, life is difficult to achieve financial goals . For example, they wanted to send their children abroad to study , which may be every parent ‘s wish, but at first did not make a good plan , such as the time approaching when it will find it difficult to achieve this goal , not so much money, even your goal is not very reasonable ; third level , asset structure is irrational, not to create the greatest gains . Possible by planning your financial goals are achieved, but the unreasonable structure of your assets , money in the bank , can not share in the investment market growth opportunities , value other people’s money , your money is in sleep , which you do not have due to your good value asset management .
Conclusion Currently, we have a shortage of transition from the era of the times to invest , how to invest in financial management, how to make money in the hands of a good arrangement that gives life to achieve a win-win investment banking and wealth management , has become a lot of people of concern . Data developed countries show that families without financial experts , there is a problem more than 90% , but after after financial experts , more than 95% can be improved. As long as people bother to financial management, believe that their financial situation will be a good change .
[ Recommended ]: in the global economic situation is not good environment, gold investment has become the major hedging instruments and sought after . Large capital investment in gold can be properly doing , but they have to choose according to their own specific situation of investment products , low risk and low return investments such as paper gold and physical gold , consider the risks and benefits of moderate gold t + d and gold stocks, high revenue and spot gold could be considered high-risk investments.