What is financial management?

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What is financial management? Baidu's authoritative explanation is very good and clear:

Financial management, financial terminology, refers to financial (property and debt) management for the purpose of maintaining and increasing financial value.

This explanation is a broader concept than what we usually call financial management. Financial management in daily life generally refers to saving money and then investing it in various investment products, hoping to achieve the purpose of maintaining and increasing the value of money.

Specifically, what we call daily financial management includes such specific actions and behaviors.

0 1

Live within your means, solve the debt and moonlight problems, and ensure that you have a deposit and a monthly balance.

The premise of financial management is that you have to "manage money".

So the first step in financial management is to solve the problem of debt and moonlight.

If your monthly income can't even pay your debts, you have to rob Peter to pay Paul, or you have light every month, you can't save the principal to manage your money, and you have no money to manage it.

To solve the problem of debt and moonlight family, you need to sort out your monthly income and expenditure:

Keep an account and see how much you spend and earn every month.

If you spend more money than you earn every month and you are still in debt, you will only owe more and more. At this time, the most important thing is to find ways to increase revenue and reduce expenditure, so that you can balance some money every month, and then make a debt repayment plan to solve the debt problem first;

If you are a moonlight family, you also need to keep an account to see where you spend your money every month. If you can't find a way to increase your income in the short term, cut off some unnecessary expenses so that you can start to have a slight balance every month.

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And study all kinds of financial products and financial knowledge in the market, so as to decide what kind of investment products to invest money in.

We have seen many cases of financial failure in social news, but the principal recovery failed. To sum up, the core reason is that we have invested in investment products beyond our ability.

In fact, financial management is an activity that requires very high comprehensive ability in knowledge reserve, common sense judgment, managing one's greed and learning ability.

Although the sales staff of wealth management products will tell customers that they can wait to make money after signing the contract, many wealth management products are easy to buy and sell on mobile phones.

However, in order to truly realize the purpose of maintaining and increasing the value of assets, and even ensure that the principal is not lost, it is necessary to have sufficient knowledge and understanding of financial management.

Therefore, it is essential to study more.

At the very least, you need to know what kinds of mainstream investment products are in the market, what level of risks and general returns are for each type, and then choose the more reliable investment products that you can grasp and bear the corresponding risks. Others, no matter how well the salesperson said it, were unmoved.

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Conduct financial management according to the knowledge and skills of investment and financial management.

After learning and mastering certain knowledge and skills of investment and financial management, you can practice financial management according to your actual situation.

For example, by studying financial management, you know that you should leave some emergency reserve funds for yourself and your family in case of emergency.

This amount is about the total expenditure of you or your family for six months. This money should be available at any time. Then this part of the money can be deposited in the bank's current account, or you want a higher income and buy a wealth management product that is always available and has very low risk.

After that, the money saved is not needed for the time being, and you can buy investment products with higher returns.

For example, products with low risks and relatively high returns, such as time savings, can be gradually invested in mainstream investment products such as bonds, funds and stocks. After they have mastered more and more investment and financial management knowledge and skills, and can clearly know their respective risks.

Related Q&A: What is the R5 level of wealth management products? Wealth management product levels R 1 to R5 respectively represent the risk levels of wealth management products. Among them, R 1 stands for low risk, that is, the wealth management products guarantee the complete repayment of the principal, and the product income changes with the investment performance, and is rarely affected by risk factors such as market fluctuations and changes in policies and regulations. R2 stands for medium and low risk, that is, wealth management products do not guarantee the repayment of principal, but the principal risk is relatively small and the income fluctuation is relatively controllable. R3 stands for medium risk, which means that wealth management products do not guarantee the repayment of principal, have certain principal risk, and the income fluctuates. R4 stands for medium-high risk, which means that the wealth management products do not guarantee the repayment of the principal, and the principal risk is high, the income fluctuates greatly, and the investment is easily affected by market fluctuations, changes in policies and regulations and other risk factors. R5 stands for high risk, which means that wealth management products do not guarantee the repayment of principal, the principal risk is extremely high, and the income fluctuates greatly, so it is only suitable for investors with very strong anti-risk ability. Financial products are products designed and issued by commercial banks and formal financial institutions themselves. After investing in relevant financial markets and purchasing relevant financial products according to the product contract, the raised funds will be distributed to investors according to the contract. The RMB wealth management products of wealth management banks can be roughly divided into bond type, trust type, linked type and QDII type. For bond investment in the money market, the investment products are generally central bank bills and short-term corporate financing bills. Since individuals cannot directly invest in central bank bills and short-term corporate financing bills, such RMB wealth management products actually provide customers with opportunities to share the investment income in the money market. Trust investment includes trust products guaranteed or repurchased by commercial banks or other financial institutions with higher credit ratings, as well as products invested in the beneficial right trust of excellent credit assets of commercial banks. The final yield of linked products is linked to the performance of relevant markets or products, such as linked to exchange rate, linked to interest rate, linked to international gold price, linked to international crude oil price, linked to Dow Jones index, linked to Hong Kong stocks, etc. QDII The so-called QDII means that qualified domestic investment institutions manage overseas wealth on behalf of customers, and refers to commercial banks that have obtained the qualification to manage overseas wealth on behalf of customers. QDII RMB wealth management products, in short, are wealth management products that customers entrust their RMB funds to qualified commercial banks, and qualified commercial banks convert RMB funds into US dollars, directly invest overseas, and after the maturity, exchange the US dollar income and principal into RMB for distribution to customers. Electronic spot new investment and wealth management products Investment channels Wealth management products can generally be purchased through commercial banks or non-bank financial institutions. Traditional channels include banks, insurance companies, securities companies, futures companies and fund companies. Emerging channels include: third-party financial institutions and integrated financial service institutions. The first kind of common products are fixed-income wealth management products, including bank wealth management products and trust wealth management products. The second category is capital preservation floating income wealth management products, which are mainly issued by banks. The third category is non-guaranteed floating income wealth management products, mainly divided into bank wealth management products and securities investment wealth management products.