Many people have a great misunderstanding of their own capital planning, and when faced with unsolvable emergencies, they can only endure the pain and are forced to sell their financial products. Here are the issues individuals face when investing for the long term:
1. What misunderstandings are easy to produce in long-term investment?
First of all. To summarize two common misconceptions in long-term investing.
Myth 1: Use short-term spare money to invest in long-term wealth management products
Long-term money and short-term investments are not a smart move, and short-term investments are not worth the cost. Generally speaking, long-term investment takes at least 3-5 years, and if you take the money you want to buy a house next year, it is very dangerous to buy a car for long-term investment in half a year. Especially in the downward market, it is easy to passively sell for fear of falling or their own urgency, resulting in losses.
Myth 2: Ignoring the product problem guarantee
The previous example is like this, because there is no guaranteed money, so when you are sick, you have to sell the financial products you invested in. Saving money for safety is a sign of responsibility for your own life. When the risk comes, if there is no way to effectively resolve it, it can only interrupt long-term investment, lose money and leave the market, and have not yet reaped investment results, and even cause a decline in living standards, which is regrettable and helpless.
2, how to plan personal funds reasonably?
Understanding the two major misunderstandings in long-term investment, I believe everyone understands that before long-term investment, we must do a good job of capital planning, and only by investing 3-5 years of long-term unused idle funds can we effectively avoid subsequent wrong operations. In addition, managing different types of money can also improve our sense of control over money and avoid problems.
So how to plan personal funds reasonably?
Divide the funds into four parts, namely live money management, sound financial management, insurance protection and long-term investment.
1. Real-time money management
First, let's talk about the first money: live money management. This money is mainly used to pay for daily expenses such as shopping, eating, watching movies, buying clothes, etc.
The money managed by live money is the money you need to use at any time, so the most important thing is that the liquidity is good and the risk is low, which also determines that the return of this money will not be too high.
2. Sound financial management
In addition to the daily expenses that will be spent at any time, there is also a type of expenditure that we will spend after a period of time, such as: half a year to plan a trip, a year to buy a car, two years of renovation money, etc., plan this money in advance, our life will be more peaceful.
The peculiarity of this money is that it does not need to be used immediately, but it is safe and does not lose as much as possible. We can calculate the time and buy some safe and stable financial products that are higher than the return on living money, such as regular financial management.
3. Insurance Coverage
This money is often overlooked by many, but it is an integral part of financial planning. If our life is only offensive rather than defensive, when the risk comes, there is no way to effectively resolve it, we have to interrupt investment, lose money and leave the market, and even cause a serious decline in living standards. The money doesn't need much, but it has to be there, and it's the last line of defense in our lives.
4. Long-term investment
This part of the money has no fixed purpose, is left for the future, and has a long investment cycle, so we can use it to invest in stock products and pursue higher returns.
A sound financial plan can improve our quality of life and well-being, making us less embarrassed in the face of difficulties
