Personal Financial Planning "Ten Steps"

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Step one: make up your mind to start managing yourself.

In general, people think that "money management" is equivalent to "no money", and then think that financial management will reduce the enjoyment and quality of life.

For young people who like to enjoy the pleasures of consumption, it is inevitable that they will resist the idea of "financial management".

Is this a fact? The answer is, of course, No.

Young people do not like to spend money or do not know how to manage their finances. The main reason is to ignore the difference between "man" and "money".

People all over the world know a truth that "money can generate money". The Western proverb is called "money makes money", meaning that "money" chasing "money" is faster and more effective than "people" pursuing money.

So how do we chase money with money? First of all, of course, we must have the first pot of gold -- a mother money that is brave enough to fight well, and then use this mother money to generate money and money.

But how do we come to this "first pot of gold"? In our lives, we are often led by "clearance sale" and "no annual fee credit card". We can not control the desire to spend money, and miss the best time to save the first barrel of gold again and again.

Therefore, it is only the first step to succeed in managing finances that we have to make up our minds to finance ourselves.

Step two: eliminate vicious debts and control benign liabilities.

If you have made up your mind to manage your own finances, the next thing you need to do is to put yourself in the picture.

Vicious liabilities are indebted human liabilities, such as illness, accidental injury, traffic accidents, and so on. Liabilities caused by these events are malignant.

In this case, if you buy insurance, you can reduce the losses caused by accidents, thereby eliminating vicious liabilities.

So the first step of financial independence is to buy an insurance that is suitable for you, and pass the money loss brought by accident to the insurance company, so that you can not worry about it.

Benign liabilities are liabilities you can control yourself, such as living expenses, entertainment expenses, children's education fees, housing loans and so on.

That is to say, you can decide your monthly cost of living, decide whether to live with your parents or move out, and whether you want to buy a house or have children after marriage.

Step three: learning finance

The "financial independence" mentioned before refers to "excluding vicious debts, controlling benign liabilities and learning financial investment".

In fact, financial independence is just the establishment of a concept. Before you achieve financial independence, there are still many preparations. Learning financial management knowledge is the most important job.

Investing in reason

What is rational investment? Simply speaking, "investors understand the meaning of investment objectives and their investment behavior after reasonable remuneration".

Why do we need to emphasize the importance of rational investment in independent financing? Because improper investment can lead to serious debt. Rational and correct investment can not only widen the gap between "income" and "expenditure", but also make your finances truly independent and help you achieve your goal in life.

Should finance be handed to experts?

The idea of giving money to experts is right, because experts can devote themselves to the work of financial management, and have more resources and tools, which can effectively increase your investment returns. These are the advantages of expert financial management.

But why do we need to learn money management knowledge? Because before you give money to expert financial management, do you have confidence in this "financial expert", and make sure that this "financial expert" will be your ultimate interest in the ultimate purpose of financial management. Finally, it is sure that the money you invest will return to your pocket when you specify it.

If you have full confidence, it is necessary for you to learn financial knowledge yourself.

Step four: set personal financial goals and implement plans.

Setting financial goals

Financial goals are best measured by numbers, how much money you can save each month, how much investment return you want to invest, and how much time you expect to achieve.

Therefore, it is recommended that your first goal should not be set too high, and the time it takes to achieve it is about 2-3 years.

Achieving financial goals

How can we achieve this goal in the shortest possible time after setting personal financial goals? Without considering other complicated factors, the achievement of general financial goals is related to the following variables:

The amount of money invested by an individual can be divided into one input or multiple inputs.

Investment instruments can be divided into fixed deposits, funds, stocks, futures, bonds and gold.

The higher the return on investment, the higher the relative risk.

Time invested in time is valuable. The longer the investment, the greater the reward.

Therefore, the most basic way to set up is to determine the amount of money a person can invest and then choose the investment tool.

In addition, the return rate of investment vehicles should exceed inflation, and finally, with the accumulation of time, the financial goals can be achieved.

Step five: develop good financial habits

One thousand yuan is not much, one dollar is no less.

The most common way of life financing is to force yourself to deposit a sum of money every day into the savings bin, which is best pparent and recorded every day.

The pparent money box is designed to enable you to check the effectiveness of financial management at any time.

When your daily savings accumulate with time and reach a certain amount and then deposit into the savings deposit, you can gradually develop the habit of saving money by managing money.

The habit of developing bookkeeping

The second step of life financial management is to cultivate the habit of keeping accounts.

The advantage of bookkeeping is that you can know where the money spent everyday is, and when financial needs are throttling, it also knows where to start.

Plus now many computer software such as Microsoft money can help you analyze the daily bookkeeping information, so bookkeeping is no longer a laborious and meaningless thing in modern life.

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Step six: investment starts from the fund.

Why do we say that investment starts from buying funds? Is that not the financial management of fund companies? In fact, we still insist on "investing in our own money" in regard to investment and financial management, but many investment vehicles have investment threshold, so we have to sacrifice some of the investment cost temporarily, and borrow the investment ability of fund companies experts to accumulate the cost of financial investment in the future.

For example, the lowest amount of investment in the open market is 1000 shares, but many stocks with good market value and good market prospects are worth two yuan or thirty thousand yuan. This makes many people eager to invest in the stock market.

Although some stocks have a market capitalization of less than ten thousand yuan, these stocks face high risk of being "milled" or "penny stock" at any time, and finally unable to earn dividends and share prices.

However, investment funds can avoid "putting more eggs into one basket", because the fund itself will do a certain degree of diversification to avoid risks.

Step seven: regular review of results

You can understand the importance of regularly reviewing results in the process of financial management if you integrate the financial investment steps you made before, in the middle and after the event.

Pre control: setting financial goals and drawing up steps to achieve goals.

The following questions can help you:

Is it reasonable to measure the goal setting?

Is there a stage goal that matches your personal life?

Is it feasible to achieve the goal?

Can you operate the steps?

Control in things: "bookkeeping" is the work that is controlled in the matter.

You can know the situation of money in your daily life from your account record, and you can always know and respond when you find abnormal cash flow.

Ex post control: the results of the completion of the plan are also important information for other stages of planning.

Step eight: advance stock investment strategy

There must be a phased goal in investing in the stock market.

If you are a novice in stock market investment, it is recommended that you invest in the blue chips of Hang Seng Index for half a year.

Because of the large share capital of blue chips, the stock price is not easy to be hyped and circulated, and the financial information of the company is more stable than that of other listed companies and the rate of return on investment is stable. Therefore, it is suitable for the novice in the stock market as a senior practice.

Cash dividends from medium and long lines are preferable.

There are two sources of remuneration for investment blue chips: one is the cash dividend allotted by the company, and the other is the difference earned by buying and selling stocks. Two

In the medium and long term investment, cash dividend is the most important reward target. If we want to set this return target, we can base on the average return on investment in previous years.

Therefore, what you are concerned about is the company's current operating conditions and profits compared with the same period last year, rather than the company's share price today.

Step nine: discuss with financial group

With the rise of the Internet, the establishment of financial websites has provided many available tools for retail investors, such as online analysis software, company financial statements and research reports.

In fact, the most effective tools for retail investors are forums and chat rooms.

Through the forum, you can express or understand other people's views on some stock related events, and absorb the argument that you think is more credible.

In chat rooms, three or five like-minded netizens can also exchange information to discuss personal financial experience.

Step ten: change strategy year after year

Personal finance is not a fixed formula. With the growth of age, financial goals and strategies are different.

The life cycle hypothesis put forward by economist Franco Modigliani has a guiding role in determining personal financial goals and strategies.

Franco points out that in youth and old age, expenditure is greater than income because of lack of working ability.

As for the prime of life, the ability to work is flourishing, and we know how to plan for the future (old age), so the income and savings increase accordingly, so the investment strategy must be adjusted accordingly.