My friend's mother has a lot of spare money in her bank card, which is usually put in her current deposit. Unfortunately, she has almost no income. I took100000 to test the water, and invested 20000 yuan a year, expecting to get back the principal and income five years later.
But my friend always felt that the people in that bank were vague, which made her feel great distrust, so she came to me for advice.
After reading it, Youcaijun can only feel that even if a good product is sold by a bad seller, it is cheating.
1
Products should be sold to the right people.
Let's talk about the products bought by friends and mothers first. Generally speaking, by fixed investment, we mean the fixed investment of the fund.
However, there is definitely no fixed annual interest rate for the fund's fixed investment, and the annual interest rate of 3.5% is a relatively low income for the fixed investment. Many fixed investors actually invest 1 year, and the income in the account is already considerable. There is no mandatory requirement that the principal cannot be recovered within five years.
After reading the contract, Youcaijun found that the product actually increased its life.
You Caijun shared this kind of products with you before, which is more suitable for locking in long-term interest rates and is very good for supporting the elderly or inheriting wealth.
The cash value that increases for life increases rapidly, so you can surrender your insurance and get the cash value after a certain period of time. Or wait until the insured 100 years before getting life insurance compensation.
Such products have great advantages in long-term financial management. However, surrender before and after the payment period is often not ideal.
For products with rapid cash value growth, their cash value may exceed the premium paid before the end of the payment period, which is the so-called return on capital.
However, the cash value of this model recommended by my friend and mother increased as follows:
The growth of cash value is relatively slow, and this product does not meet the investment needs of friends and mothers.
The product will not be returned until the seventh year, not the five-year fixed investment that the sales said. If you withdraw money after five years, as the salesperson said, you can only get more than 87,000 yuan, and the principal100,000 is not a small loss.
After explaining the situation to a friend, my mother could not accept a longer investment period and decided to surrender. Fortunately, the product is still in the hesitation period, and surrender will not cause any losses.
If she just wants to lock in a fixed interest rate for five years, she actually has many better options, such as national debt and bank deposits, which can reach 3.5% at present. Of course, the downward trend of long-term interest rate is a general trend, and it is unknown what the future interest rate will be.
This product recommended by the bank is not very good. We can find a better substitute. But if you hold it for a long time, it will also have a good return. However, the sales staff positioned it as a five-year "fixed investment" and could not give play to its advantages.
Even if the cash value increases rapidly, it is not suitable for people who only intend to hold it for three to five years. They may have just returned to their original capital, or even have not returned to their original capital, depending on the cash value of the product.
However, if it is given to people who need to lock in long-term interest rates, such as ten years, twenty years or even longer, the advantages of this kind of products will come out. They can lock in long-term interest rates and compound interest, and they can take out money flexibly.
Therefore, even if the right product is recommended to the wrong person, it will become a liar.
Youcaijun hates this kind of seller who dares to say anything, which makes investors suffer and makes innocent products and industries suffer.
2
How to treat a product
After this incident, Youcaijun felt it necessary to popularize how to look at wealth management products.
Different financial products, we look at different materials, such as product contract, prospectus, risk warning and so on. No matter what materials, there will be one thing in common, that is, there are many words and they are boring.
Just like the friend I mentioned just now, she read the contract before sending it to me, but she got nothing. However, you Caijun found the problem soon after he got the contract. I think the difference is that I went to see it with a question, but she didn't.
Looking at these boring words aimlessly, I soon lost my mind. With a purpose, it is easier to get effective information with questions.
Youyoujun told you before that the three elements of investment are safety, liquidity and profitability. Only when these three points meet our needs will we consider investing.
So when we study a product, we can take this question with us: What is the safety of the product? How about liquidity? Is there any restriction on withdrawing money? How is the income?
0 1 security
The safety judgment of fixed-income products and net-worth products is different.
(Paying interest at the agreed interest rate belongs to the fixed income category)
(The net value category shows historical income or reference interest rate)
Fixed income products
For products with fixed income, security depends on what guarantees the principal and income. You can know the general safety of this kind of products by seeing the product name.
Common fixed-income products include bank deposits, national debt, annuity insurance, life extension, reverse repurchase of national debt, quotation repurchase, income certificates and so on.
When we see the complete name of the product, we can basically know what the product is like by looking at the suffix of the product, such as XX life extension, XX annuity and XX national debt. If it is not displayed in the product name, you can also check more detailed product information.
It is the 500,000 yuan stipulated by the bank itself and the Deposit Insurance Regulations that guarantees the repayment of the principal and interest of bank deposits; It is the insurance company that guarantees annuity insurance and increases whole life insurance's debt service. The state has regulations that once it goes bankrupt, whole life insurance will be taken over by other companies; Quote repurchase, income certificate, and securities companies guarantee the repayment of principal and interest with their own assets.
Therefore, the strength of a product with guaranteed capital and interest depends on how strong its backing strength is and what regulations the state has for such products.
Net worth product
Net worth products, such as funds, old-age security products, bank financing (net worth) and so on.
The income of such products depends on the performance of the products, and the profit and loss are determined by the investment performance of the products, and the investment scope of the products is the key to determine the safety of the products.
Among them, the investment scope of the fund is disclosed in the most detailed way. In addition to the investment scope, the specific heavy stocks and bonds will be listed in the regular report.
(Financial investment scope of the bank)
Product investment is mostly low-risk assets, so the overall risk is naturally low. If you mainly invest in stocks or even leveraged option futures, the overall risk is naturally higher.
02 liquidity
Liquidity means taking out money when needed, which is inconvenient? We need to consider the withdrawal limit, the arrival time and the income stability.
Withdrawal restrictions: some products have withdrawal restrictions, such as five-year deposits, which are not allowed to be withdrawn within five years (of course, it is not completely prohibited, but it is ok if you are willing to sacrifice your income). Of course, when we consider liquidity, we will try our best to choose a term that meets our investment needs.
Arrival time: We want to withdraw the money, we need to submit the application first, and then wait for the money to arrive. Except for a few money funds, they are basically not received immediately. For many products, there will be a few days between our application and getting the money.
It will be clearly written in the contract and product introduction, generally written under the product overview, trading rules and redemption introduction.
We will see product redemptions T+ 1, T+2 ... T refers to the trading day. For example, a fund redemption is T+ 1, which means that we will redeem it before 3: 00 pm on the working day and will not receive the account until the next trading day.
Everyone should also look at the risk warning, which will also write under what circumstances the redemption may fail.
Income stability: this is the most easily overlooked point. Although some products will not restrict redemption, they look like current products, but they cannot be used as current products.
For example, a very popular old-age security product on WeChat-Taikang Pension Hui Yuetai, this product is written as flexible redemption, and it can be redeemed whenever it wants, but it will be risky to lose money if it is only held for a few days. It is generally recommended to hold it for more than half a year. The stability of income is also an implicit liquidity constraint.
03 income:
Fixed income products
The income of fixed income products has been stipulated from the beginning, so I won't say much about the direct income.
We need to calculate the IRR of annuity insurance and life extension.
(Cash value calculation of life extension)
Taking this increased life span as an example, let's calculate the income from surrender in the tenth year.
Open the EXCEL form, we fill in the policy year in the first column, the cash flow in the second column, and the IRR in the third column, which is the actual rate of return.
There are positive and negative symbols when filling in cash flow. For us, paying the premium is cash outflow, with a negative sign in front. When you surrender and get back the cash value, it is cash inflow, and there is no need to add a sign. In years with no cash flow, let's add 0.
Then select a blank, click the insert formula above, find the IRR formula in the formula, and then select the cash flow we fill in, and you can calculate the result.
(Operation screenshot)
Net worth product
As for net worth products, Youcaijun said before that we should estimate the future income by combining the long-term performance in the past, that is, the historical performance in the past three years or more.
Historical performance is the report card of the past, which can only represent the good performance of the past, not the future. However, a student who has always had excellent grades has a high probability of getting high scores in the future, so his long-term performance before can be used as an important reference index.
If at least three years have passed, the income of this product is good, and there is a form of steady growth. If there is no major adjustment in the future investment style, the performance will probably continue the good results of the past.
three
Write it at the end
From the explosion of crude oil in China Bank to the explosion of high-net-worth and low-risk wealth management sold by Industrial and Commercial Bank of China some time ago, there have been many scandals about products sold by banks this year, so we can't buy them with our eyes closed.
It's not easy to make money these days, so you should study hard and invest well.