Personal Finance Actuarial Future

Mr. Zhao is the general manager of a high-tech company in Shenzhen. The total income of the husband and wife exceeds RMB 1 million each year. My 5-year-old daughter is in kindergarten. Excluding personal and family expenses, they can save hundreds of thousands of dollars a year. How to properly manage these funds and make them increase in value has become a topic of their concern. At present, Mr. Zhao urgently needs professional personal financial guidance.

Mr. Zhao's situation is quite representative among the managers: he has a relatively high income and has a certain amount of idle funds; he hopes that he and his family will have a secure future and let the idle funds continue to appreciate; Can't take too much time to manage one's own purse. So independent personal finance experts come into their lives.

The industry that emerged as the times require

Personal finance is to determine one's own life and investment goals, review one's asset allocation and affordability, adjust asset allocation and investment under the advice of experts, and keep abreast of one's assets Account and related information to maximize the return of personal assets. The core content includes insurance plans, investment plans, education plans, income tax plans, retirement plans, real estate plans, etc. In China, institutions that provide personal wealth management products include banks, insurance companies, and trust and investment companies. The products involve deposits, insurance, bonds, funds, stocks, and real estate.

A "personal financial planner" (CFP) who specializes in providing personal financial consulting services will consider the client's age, personality, income and expenditure status, industry, career stage and family background, and then combine the client's life goals , rely on professional tools to develop a realistic financial plan.

Currently in China, CFPs mostly rely on a professional financial service institution to provide services free of charge, which easily makes people doubt the independence of their opinions. According to Li Ying of Shenzhen Ping An Insurance Company, the opinion provided by CFP is actually a general plan, which is generally limited to the strategic level. Taking her personal financial office as an example, the insurance items in CFP's plan only involve the total insurance benefit amount and premium expenses. Under this premise, customers can make their own decisions to buy any company's products through comparison.

Principles that must be followed

The goal is clear, planning the actual personal financial management must first determine a clear, rather than vague financial management goal, this goal needs to be proposed by the individual, and then the CFP will develop the industry and individual in which he works. potential, etc. are evaluated, and then comprehensively calculated.

From Mr. Zhao's plan, we can see that his goal is to have a wealth of 10 million RMB at the age of 50, in addition to buying a car, saving children's education and starting a business fund. Nearly 35 years old, Mr. Zhao has a Ph.D. and is in the popular IT industry, so he naturally has enough confidence in the future. However, the risk in the IT industry is relatively greater. Therefore, in this plan, CFP will end his current annual dividend of 600,000 to the end of the third year, and only retain an annual salary of 240,000. This more conservative plan is easier to implement.

Since many data in financial planning are based on predictions, it is impossible to predict the future with complete accuracy. Therefore, it is necessary to regularly check the planning documents. Generally speaking, it is necessary to check once every two years, and adjust financial planning accordingly according to changes in career, family, income, etc.

Safety first, protection first The primary goal of personal financial management is to provide protection for future life, safety is the most important, otherwise investment and value-added will be reduced to empty talk. Safety includes personal safety and property safety, as well as necessary expenses such as child education, real estate mortgage, pension and emergency.

As can be seen from Mr. Zhao's plan, the designed retirement plan, emergency fund, education fund and family member insurance occupy an important position. According to the calculation, the fund gap of Mr. Zhao's retirement period is 2.94 million, so 89,000 is invested every year for the pension reserve fund. For the safety first principle, invest in varieties with relatively low risk. The plan proposes to use 65% of the funds for deposits, 20% for bonds and 15% to buy open-end funds.

Insurance has the dual functions of investment and insurance, and purchasing insurance is an important part of ensuring security. In Mr. Zhao's plan, insurance includes three categories of family property insurance, health insurance and life insurance. According to the current family income, the plan is to pay 116,000 yuan in premiums each year. On this basis, another reserve of 54,000 emergency funds and an annual education fund of 130,000.

Product portfolio, comprehensive planning Generally speaking, risk and return are directly proportional, so it needs to be evaluated according to each person's personality characteristics, anti-risk ability, etc., and then unified planning by CFP.

According to Mr. Zhao's personality test, his risk preference is conservative. His attitude towards investment is that he hopes for stable investment returns and is unwilling to exchange high risks for returns. Therefore, in his investment strategy, he chooses savings, bonds and Fund-based products do not involve high-risk investments such as stocks, and the investment ratio is appropriately adjusted according to age and economic strength.

A far immature market

Introduced by Ye Xinjie, Director of Retail Business Division of Bank of China Shenzhen Branch, personal wealth management business is already very mature in western developed countries or regions. Taking Hong Kong as an example, due to the mixed operation, customers can enjoy one-stop service in the bank, they can obtain various products and services of personal financial management, and can entrust professional brokers or agents for investment. In China, the institutions that provide personal financial services are mainly banks and insurance companies. Due to the implementation of separate business operations, the business of financial institutions can penetrate each other, but they only sell products on a consignment basis.

The retail business carried out by the bank is mainly aimed at personal finance. China Merchants Bank's "Golden Sunflower", Industrial and Commercial Bank's "Elite Club Account", Bank of China's "BOC Wealth Management" and Agricultural Bank's "Financial Supermarket", as well as HSBC's Premier Banking, Standard Chartered's Integrated Wealth Management and Priority Banking are all publicizing major events. . Due to policy restrictions, the personal wealth management business of foreign banks in China is limited to the deposit and withdrawal stage, and substantive services have not really started.
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Mr. Zhao's personal financial proposal (summary)

1. Basic status of family and income and expenditure
Family members
Mr. Zhao is 35 years old
Mrs. Zhao is 30 years old
Daughter is 5 years old

Assets and Liabilities
Assets--- Deposit: 500,000; Others: 100,000, Property: 1 million
Liabilities-- - Mortgage loan: 600,000
Net worth: 1,000,000

Annual income and expenditure
Income--- Salary: Mr. Zhao 240,000; Mrs. Zhao 60,000; Interest: 10,000; Company Dividends: 600,000; total income: 910,000

Expenses
Living expenses: Mr. Zhao 30,000; Mrs. Zhao 30,000; children 24,000; parents 24,000; mortgage 72,000; total expenses 18 10,000

Savings: 730,000

Second, financial goals
1. The annual travel budget will be 40,000 at the beginning of this year, and the annual growth rate will be 3% before retirement, and the time will be 25 years;
2. Plan to buy a car next year, worth 200,000, and have reserved 200,000.
3. After the 14th year, the child will go to university and reserve 13 years, a total of 600,000 yuan, 40,000 yuan per year for undergraduate studies, and 250,000 yuan per year for master's degree abroad.
4. Retire for retirement at the age of 55, and the post-retirement expenditure is 179,000 per year, for a total of 23 years.
5. Hope to accumulate wealth of 10 million within 15 years.
6. I also hope to reserve 200,000 entrepreneurial funds for my children.

III. Retirement planning
After calculating the living expenses during the retirement period and subtracting the estimated income and the existing social security fund, it is concluded that the funding gap for the retirement period is 2.94 million. It is recommended to establish a special fund for pension savings and invest in varieties with less risk. Invest 89,000 per year, 65% are put into deposits, 20% are purchased in bonds, and 15% are purchased in funds or investment-linked insurance.

4. Insurance planning
A set of insurance packages was designed, including family property insurance, health insurance and life insurance, with an annual premium of 116,000 yuan. The life insurance is mainly based on Mr. Zhao, the mainstay of the family's economy, with a total compensation of 3.56 million yuan.

V. Investment planning
Because Mr. Zhao is a conservative investor, the main distribution of financial assets is regular bank deposits, some bonds and funds, etc., but no stocks.

6. Cash flow management
Through the above planning for different financial goals, the annual reserve amount is obtained, and based on this, the annual cash inflow is allocated, and the premium expenditure and education fund are reserved. , pension fund reserves and emergency funds as cash outflows, and the funds are allocated in proportion to deposits, bonds, funds and insurance products according to the above plan. When there is a surplus, it supplements the accumulation of wealth; when there is a loss, it is made up from the accumulation of wealth.

VII. Total assets
After retirement planning, insurance planning, investment planning and cash flow management, the characteristics of your asset structure are: mainly financial assets, with the proportion of non-financial assets Small, your total assets grow steadily before retirement, and maintain a small, slow growth after retirement.