When considering how to allocate funds to increase value, you first need to consider what your own risk appetite is, rather than the amount of funds or what the funds should be used for. Only by choosing a method that suits you and doing it consistently can you truly grow your wealth steadily.

In fact, the methods to achieve wealth appreciation are nothing more than the following: deposits, bonds, stocks, savings insurance, funds, and of course higher-risk financial products, futures, options, etc., in a broader sense It seems that investing in physical assets is also feasible, such as real estate, antiques, art, etc.

We divide these investable products into four categories:

Category 1: Products with very low risk and guaranteed principal, such as large bank time deposits and monetary funds. , national bonds, savings insurance, etc. These products are basically risk-free, but the returns are also relatively low.

The second category: medium risk, with a certain degree of principal protection, such as corporate bonds, various types of bond-focused funds, non-stock funds or financial products issued by banks, etc. The returns of these products are relatively high. But it is basically a fixed income, not much higher than the deposit interest rate.

Category 3: The risk is relatively high and the principal is not guaranteed. Needless to say, stocks, futures, various stocks-focused funds, etc., are all things that may not necessarily make money.

Category 4: Investment products whose risks are difficult to estimate and require investors to have professional capabilities. Such as antiques, works of art, etc., as well as some complex financial products such as trusts and asset management plans. These fields generally require investors to have certain professional capabilities and financial strength, and their risks vary greatly. If you don’t understand them, just don’t participate.

Ordinary people who want to manage finances must first consider how much risk they can bear, secondly consider the liquidity of funds, and finally consider returns. If I were a risk averse person with a capital of about 200,000, I would choose 90% of the second category products (such as bond funds, bank financial management, etc.) and 10% of the third category products (stocks or corporate bonds) . As my risk tolerance becomes stronger, I will increase my investment in the third category of products. However, without professional knowledge, I will never participate in the financial derivatives in the third category and the fourth category of investment products. of. As for the first type of product, I will only consider it if I have relatively large funds.