What? What is financial management?
In fact, financial management is to rationally allocate your own assets to increase income and avoid risks. There are many ways to manage money, such as buying insurance, investing in the stock market, buying government bonds, investing in funds and so on. But before you manage your money, you must remember a principle, don't touch things you are not familiar with.
Why? Why manage money?
Because our assets will actually face two problems at any time. One is risk and the other is depreciation. In terms of risks, first, the property itself will face risks, for example, our physical property will face risks such as accidental damage and loss; Second, for other reasons, we may pay a lot of property, such as getting sick.
In terms of depreciation, the inevitable factor of property depreciation is inflation, that is, the purchasing power of paper money as a universal equivalent will weaken with time. Why is inflation happening? This is a professional economic question, and I won't answer it for the time being. But inflation is indeed an inevitable problem in the capitalist economic system. In addition to inflation, the value of our assets will also change due to natural wear and tear, policies, market supply and demand and other factors.
Then financial management is actually dealing with these two issues, such as the risks faced by transferring property through insurance; Earn income by investing in stocks, thus outperforming inflation.
How come? How to manage money?
How to manage money is actually a very complicated, professional and systematic problem. As Xiao Bai, today we will talk about how to start financial management. The premise of financial management is to have money, which means you need a pool of funds for you to allocate assets. In other words, the first step in our financial management is to save our own fund pool first, and the means is nothing more than increasing revenue and reducing expenditure.
Open source is to increase the source of income. Most of us earn money by selling our unit time through labor. Income = hourly wage x working hours. If you want to increase your income, don't extend your working hours, because everyone's time and energy are limited, and the income increase brought by this method is very limited. This is the thinking of the poor. The thinking of the rich is to raise hourly wages. Make more use of your knowledge, skills and thinking to create value. This principle is embodied in the work, that is, to enrich their professional knowledge and skills, and to enhance their business thinking and industry awareness. Can also be reflected in the use of their own expertise in other areas, to expand some sideline. The Internet provides us with a good platform, and we ordinary people can become amateur experts in a certain field, thus attracting traffic and gaining profits.
Saving money is actually saving money. If we look at the bills in the past three months, we can definitely classify consumption from these three dimensions, namely necessity, necessity and desirability. Necessities refer to the expenses necessary for people's survival, such as basic needs of food, clothing, housing and transportation. Need means that we can further improve our lives after completing our living needs, such as supplementing high-quality protein and better living environment; What we want corresponds to our desires, in order to satisfy our desires for pleasure, vanity, excessive possession and so on. The first step to reduce expenses is to recognize your own needs, needs and wants. Ensure the necessity, give consideration to some needs and give up what you want. You can use bookkeeping or ask yourself before each consumption. The former is a better way. Checking bills regularly also helps us to distinguish necessity, need and desire.
At that time, after we had the fund pool, how should we inform the assets? How should insurance, stocks, funds and creditor's rights be distributed? This is more complicated and can only be discussed one by one in the following pages.