First, learn to keep accounts.
Second, distinguish between assets and liabilities
Third, know your risk tolerance.
Fourth, we must have a correct investment mentality.
With the improvement of our income and living standard, there is more and more disposable money. Now people are no longer satisfied with just keeping their money in the bank, but want to be Qian Shengqian, so everyone has embarked on their own financial management. The above four common sense of financial management can make you get twice the result with half the effort.
Next, let me tell you more about the above common sense:
First, learn to keep accounts.
Because bookkeeping is the first step in financial management, only by knowing where your money is spent can you better optimize your expenditure and make a reasonable financial budget and plan. Just like a doctor treating a patient, only a preliminary diagnosis can better prescribe the right medicine.
Through bookkeeping, we can clearly see the flow of money from the bill, so as to analyze the rationality of expenditure and see which ones should be spent more and which ones should not be spent the least. These are all unnecessary expenses. Doing so will help us control expenditure, increase income balance and accumulate original funds for future financial management.
Many people's wages are moonlight every month, and it is common to spend them all before the end of the month. They live a moonlight family life, and want to save money but can't save it.
Because you don't know where all your money is spent, which is necessary and which is impulsive. Spend a little here and a little there, and you won't find that your salary is running out or even gone until the end of the month.
At present, there are many accounting software on the market, which is also very convenient, such as: Notes, DailyBill, Squirrel Bookkeeping, Netease Money. These are relatively easy-to-use accounting software. Just open the software when you spend money. Very convenient and simple.
Take a notebook as an example: For example, I spent 88 yuan at lunch today, so I can record it by opening the software.
Then you can choose the one that suits you from the above apps according to your hobbies.
Second, distinguish between assets and liabilities
An asset is something that can put money in your pocket, and it can bring you continuous income. Just like the golden goose laying eggs, as long as the golden goose is there, it will lay eggs continuously, and the eggs will be replaced with feed for the golden goose, so the golden goose will become fatter and fatter and lay more eggs. Debt is something that takes money from your pocket and keeps it away from you.
Do you know any assets and liabilities now? Let me give you a question to test:
Title: Do you think the house is an asset?
A: Yes. B: No.
You can close your eyes first, don't look at the following answers first, and choose your answers in your mind.
If you choose option A, then I'm sorry, you are wrong.
If you are a small partner who chooses B, don't be too happy, because you are not right either.
Everyone will be confused at this time. Why is the house not an asset or a liability?
In fact, whether a house is an asset or a liability cannot be generalized, depending on its state.
For example, housing is a kind of debt.
The house you live in needs you to pay property management fees, utilities, maintenance fees and so on. The house you live in won't bring you a penny. Instead, it just takes money from your pocket. So the property is not your asset, but your debt.
For example, a rented house is an asset.
Because renting a house can bring you a steady stream of rental cash flow.
So to put it simply: assets are things that can bring money into your pocket, and liabilities are things that take money out of your pocket.
Rich people like to turn money into assets, then assets generate money, and then buy more money into assets. More assets can generate more money, and through continuous circulation, it will become richer and richer. In fact, financial management is to turn our money into assets rather than liabilities as much as possible.
Here I give you a formula to check your current financial situation:
Asset-liability ratio = total liabilities/total assets
Generally speaking, the asset-liability ratio should not exceed 30%~40%. If it is more than 50%, then your financial health is worrying, and even a financial crisis may occur! Then how do you know your responsibility? You can calculate your assets and liabilities according to this table.
If you need a sentence template, just pay attention to it in the comment area. I will send it to you then.
Third, know your risk tolerance.
Financial investment should consider risks before benefits. If you can't control risks reasonably, how can you talk about benefits? Investment is risky, and income and risk are often positively related. Don't just see the high returns on the surface of investment products and ignore the high risks behind them. Remember one sentence: you are greedy for other people's interest, and others are greedy for your principal.
Let's briefly talk about investment products with different risks:
Low-risk investment varieties: bank deposits, balance treasure, bonds, etc. It is difficult to generate high returns.
Medium and high-risk investment varieties: funds
High-risk investment products: such as stocks, futures and foreign exchange.
For example, if you can't bear the high risks brought by high returns, don't invest in stocks, futures and foreign exchange, otherwise you may lose a lot. Then how can I know which products I am suitable for?
Facing all kinds of investment and wealth management products in the market, we should first evaluate our risk tolerance, and then choose the wealth management products that match our risk tolerance.
Where is the risk tolerance assessed?
Take Alipay, which we often use, as an example. Open Alipay-My-Total Assets-Go to the bottom to evaluate the risk type.
After your evaluation, when you buy a wealth management product at Alipay, you will be prompted whether this product is suitable for your current risk tolerance.
Fourth, we must have a correct investment mentality.
The purpose of financial management is not to make us rich overnight, but to arrange our own funds reasonably and scientifically, so that the funds can generate the maximum income, thus continuously increasing our assets like snowballing. If you manage your money with the idea of "getting rich overnight" from the beginning, you will have a greedy heart, which will make you lose your original reason and only want to invest in high-yield products and ignore high risks.
Once Amazon CEO Bezos asked Buffett: "Your investment philosophy is very simple, why not simply copy your approach?"
Buffett said: "Because no one wants to get rich slowly."
Yes, now many people always want to get rich overnight by financial management, but the final result is extreme poverty overnight.
Financial management is a long-term process that requires time and patience. Financial management won't make you rich overnight, but it can make you rich slowly.