Einstein once said that the most powerful energy in the world is not an atomic bomb, but compound interest+time.
Many newcomers to investment and financial management "can't see clearly" the various investment and financial products on the market. One of the important reasons is that the foundation of financial management is not well laid, and the time value of money and the energy of compound interest are not understood.
The greater feature of compound interest is that it is exponential in the middle and late stage. The secret of Warren Buffett's wealth accumulation depends on the explosive growth of compound interest in the middle and late period. Before the age of 50, he was rich; After the age of 60, he became the world's top richest man.
Without smart ability, you can still choose to beat others in a huge social circle. Give a simple example. Taking ten years as an enterprise, the annual compound interest is 8%, 65,438+00% and 65,438+05%. Although you don't know how much it will cost, you will beat many people in 20 years.
Compound interest income 1 10,000 yuan
Therefore, to be a discerning investor, understanding the time value and compound interest of money is the main premise. Only by accurately understanding the definition of discount rate and final value can we use it as a special tool to help us analyze investment and wealth management products more effectively and clearly.
Second, financial novices should learn to moderately reduce income expectations.
In order to gain a sense of superiority in the current investment market, a very simple way is to reduce the expected return. There is a saying that is very good. There is no great hope and it is not easy to cause too many disappointments. According to Bian Xiao's incomplete statistical analysis, most people will involuntarily set their own income expectations around the market average. This is actually very effective. In fact, the share of people who can get above-average returns is very small. Therefore, it is usually very easy to relax the psychological state moderately and take the average income as the overall investment goal.
Third, novice investment should not be concentrated, and small-scale diversified investment is the safest.
Everyone knows that eggs are not put in the same bamboo basket. Regardless of all investment and wealth management products, there are more or less risks. In the case that novices are unable to assess risks, it is one of the most effective ways to reduce risks by choosing small diversified investments. Of course, we still need to learn and train the basic knowledge of financial management, and we must be clear about the investment and financial products we want to invest in. You can't say that you can invest indiscriminately by diversifying your investment.
Fourth, novice financial management should accumulate unobstructed information.
The financial investment market is unpredictable. If there is no smooth information channel, it is impossible to grasp market information in time. Therefore, in the process of investment and financial management, we must keep the channels of information unblocked, pay attention to the changes of China's politics, metallurgy and macro policies anytime and anywhere, and get relevant market information in time. A more direct way is to grasp market information through various online media. Now that smartphones are very popular, downloading an app can access financial news, which is convenient and fast.
5. Basic products suitable for novice investment and financial management.
There are many investment and wealth management products now. Generally speaking, people think that stocks, futures trading and foreign exchange investment are all high-risk investments. Fixed-income investments such as bank deposits, house rent, insurance and P2P are low-risk investments. Novices should effectively match investment and wealth management products according to their age, family structure, wealth level and their own requirements. Ensure proper liquidity and profitability. But for most people, it is more effective to put forward that every debt is a commodity, and a stable investment and wealth management product that can be withdrawn anytime and anywhere through debt transfer after investment.