How can the younger generation plan the future better? Professionals interviewed by China Economic Times said that everything is mixed, and only by avoiding potential risks can there be a smooth road. The perfect combination of insurance, savings and investment can be called financial management. The investment does not exceed 50% of the total assets, and the conservative and radical types each account for half.
Retirement savings is both science and art.
Fidelity International is a global pension fund management company. They believe that retirement savings are both science and art and need to be adjusted according to everyone's actual situation.
He Huifen, chairman of Fidelity International in China, told China Economic Times that young people should pay attention to three important data: savings schedule, annual savings rate and potential sustainable withdrawal rate. The savings schedule, in short, is how much old-age savings need to be accumulated to meet the expenses after retirement. Take the year of retirement as an example. When people retire at the age of 60, they have to earn nine times the annual income of that year to pay the pension for the following years. The annual savings rate is how much money you need to save for retirement every year. When I was young, the annual savings rate was about 19%, which reached the final suitable retirement living standard. The potential sustainable withdrawal rate refers to the amount that can be continuously withdrawn from the pension during retirement.
Zu Guo Ming, general manager of the strategic cooperation department of financial institutions of Ant Group, told this reporter that he hoped more young people would have the habit of long-term investment. If the third pillar of pension can be implemented under the impetus of policies, I hope more people will open their own pension accounts. Residents can consider different allocation ratios according to their age, family, income and liabilities. One of them is "5-3-2", where 50% of the money is used for daily living expenses, 30% for living security, and 20% is more radical. Young people have a high desire for consumption, and they want to be a "moonlight family" and enjoy life very much. But with the growth of age, if you have a family, you may spend more and more, so you must balance it. You can adopt "4-3-3", 40% of the money is used for daily living expenses, 30% is invested in life insurance, family insurance and retirement savings, and 30% is more actively invested. In this case, when you are in your prime, the income may be the best. The last ratio is "3-5-2". With the growth of age, we have to accept the test of future age, our ability to take risks is relatively weak, and our desire for consumption may also decline. 30% of the money is used for daily living expenses, 50% for savings and pension, and 20% for high-risk investment. In addition, there is a smarter and more accurate personalized ratio. This configuration scheme requires professional institutions to calculate through algorithms based on big data and assets, which is more professional and rational.
Insurance, savings and investment should be perfectly combined.
The mentality of the younger generation in China is undergoing positive changes. This shows that the time is ripe to further support them to take the first step of pension planning. In addition to insufficient funds and high costs, 24% of young people who have no savings habits said that lack of investment knowledge hindered their savings and investment.
How do young people manage their finances better? Li Zhibin, a senior partner of Mingya Insurance Broker, told China Economic Times reporter: In just over ten years, we have experienced investment products such as stocks, real estate, funds, trusts, equity, P2P and blockchain over and over again. There are no high-yield and reliable financial products in the world. Everything is mixed, and avoiding potential risks can usher in a smooth road. Modern financial products usually have a history of hundreds of years. Measuring them with a single rate of return is the biggest misunderstanding of finance. And those who blindly pursue the rate of return have some gambler mentality in their hearts. Financial management is a struggle between self-discipline and greed. Equating financial management with investment is the biggest misunderstanding of financial management. Financial management pays attention to the balance and rational distribution of funds, not just the rate of return. Every financial product has its own functions and attributes, and financial management pursues the rationality of asset structure. Through the rational allocation of funds, we will give full play to the advantages of various financial products, so as to foster strengths and avoid weaknesses and have both offensive and defensive capabilities. Financial management is divided into three parts, the bottom is insurance and savings, and the top is investment, which is divided into conservative and radical types. Don't save too much, too much will affect the profitability of assets. Savings should account for 10%-20% of total assets, and it is enough to provide the money that will be spent in the last six months to one year. There are many kinds of investments, which are divided into two categories: one is conservative, represented by bonds and trusts; One is radical, represented by equity, stocks and futures. Investment needs to allocate funds, and you can't invest all your money in high-risk and unfamiliar areas. For example, we can't put all our money into the stock market. Even index funds can't do it, because the logic of investing in index funds is that the stock index is improving for a long time.
"We must adhere to the rational allocation of funds and maintain the rationality of the structure." The investment should not exceed 50% of the total assets, with conservative and radical types accounting for half each. The perfect combination of insurance, savings and investment can be called financial management. Reasonable allocation, advance and retreat, high yield, capital preservation. Financial management is: distribution in proportion and preparation by stages. "Proportion" means not to put all your eggs in one basket, but always leave a way out. Determine the money to be used and only put it in a certain channel; The rest of the useless money is invested in high-risk investment. "Stage" refers to the planning of funds according to their short-term, medium-term and long-term uses.
More young people also said that setting monthly fixed savings is helpful to improve personal financial situation and is a common strategy to increase old-age savings. In order to save money, some young people are willing to spend less on entertainment, which is a positive signal that young people are more willing to balance their financial goals than before and consider adjusting their possible lifestyles to improve their long-term financial situation.