Singles' Day is coming soon, and I believe that those who participate in the Singles' Day promotion have become the final payment people. The final payment people have a close connection with the recently popular "working people" label. The "working people" and "final payment people" labels represent the majority of people, and almost everyone hovers around these two labels. The new trend of "working people" is both self-deprecating and mocking for most people, as well as a true reflection of their inner thoughts. The phrase "Good morning, working people" successfully trended, so as a working person, should you learn about financial investment? The answer is definitely yes, but how much money should you put into investment?
In the article "Understanding the Risk of Funds", we know that fund investment carries risks. Since there are risks, all funds should not be invested at once. We need to consider how to allocate funds reasonably and avoid situations where there is no cash flow. For example, buying a paid course may seem very useful at the time of purchase, but it may not be useful afterwards. This is also a risk. You should not buy a paid course just because someone recommended it. You should choose a paid course that you need. This way, you won't waste money and it will be useful for yourself. When it comes to investment activities, we need to consider how to allocate limited funds and how to buy undervalued assets with limited funds.
Because investment is risky, the money used for investment must be spare money. It should only be considered after solving the basic needs of clothing, food, shelter, and transportation. If your salary is only enough for daily expenses, you should first improve your earning ability before considering investment activities. As working people, how should we allocate our funds? Here are two allocation methods:
- One-third rule
There is a Western saying that everyone should divide their money into three parts: one part for buying property, one part for trading, and the remaining part for savings. This method divides your funds into three parts, used for buying houses, investment, and savings. You can take one-third of your monthly salary for financial investment, regardless of the amount. Starting to try is a kind of change, and changing your mindset is the first step to taking action.
- Finger counting algorithm
This algorithm is used to estimate how much of your assets should be used for investment and how much should be saved. It means that you can know the answer by counting your fingers. Allocate your funds based on your age:
If you are 30 years old, at least 30% of your assets should be invested in savings, and other investments should not exceed 70%;
If you are 40 years old, at least 40% of your assets should be invested in savings, and other investments should not exceed 60%;
And so on, the proportion of various assets = 100 - your current age.
This is a very good suggestion. The older you are, the less you can afford to take risks. The investment style should be adjusted according to your age. You can also consider your own situation and find a suitable way to allocate your funds and put it into practice.
Summary:
- Use your surplus money for investment.
- Allocate funds reasonably to ensure sufficient emergency funds.
- Do not borrow money to invest in funds because you cannot determine when you will make a profit, it could be short or long.
- Maintain a good investment mentality and avoid speculation.
- Never invest all your funds.