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1. The Transition from Living Paycheck to Paycheck to Saving 10,000 a Month#

However, when it comes to saving, one should not learn from Xixi~ In the fourth lesson of Jianqi's introductory course on personal finance, it was mentioned that the saving methods taught in "Money Money's Dad Teaches You to Achieve Financial Freedom" include:

1. Saving 10% of your monthly income is a forced saving that won't affect your life, but it is your golden goose; the earlier you start nurturing it, the bigger and faster it will grow.

2. At the end of the year, you can save 50% and reward yourself with the other 50%.

3. When you get a raise, save 50% of the increase. For example, if last year's monthly salary was 4,000 and you saved 400 each month, and this year your salary is 5,000, then save 400 + 500 = 900 yuan each month. This will help you keep your enjoyment of life at a pace slower than your income increase, training your self-discipline.

I inadvertently saw Jianqi's recommendation on Duokan and noticed so many inspiring kids. If you don't manage your finances, your finances won't manage you. So, this year, I must make myself grow. I'm not good at writing this kind of article; I always feel my thoughts are a bit messy, but let's encourage each other. My financial philosophy is always to cut unnecessary expenses and primarily increase income. When you're young, why suffer? Shouldn't you wait until you're old to suffer?

I graduated in 2010 with zero savings, so all my accumulation started when I began working. I've been in Shanghai for almost eight years now.

During my university years, I only worked as a tutor and a typist, and I also helped my aunt watch the door. However, my mom was quite strict; when I told her how much I earned in a month, my living expenses for that month were just 800 yuan minus what I earned. Plus, I love to travel, so even if I was left with only 200 yuan for food in a month, I still wanted to go out and explore. This has been a dream I've accumulated since childhood.

I started my first job in May 2010 (in the Huaihai Road CBD), earning 100 yuan a day. At that time, my thought was that I had never had so much money before. To save money on meals, I specifically went home to learn cooking since my family runs a restaurant. I learned a few signature dishes in just a few days, enough to manage eight dishes and a soup, which was still no problem, haha.

However, when you add up the rent and other expenses, and since I had to work, I thought I should buy more clothes. Back then, I was quite thin, and I lost control. I also got a card at a beauty salon and particularly enjoyed getting my nails done, and I bought a bunch of cosmetics, which are now basically expired.

In my first year of work, I was broke and even in debt. In the second year, I saved about 20,000, and in the third year, I saved about 50,000. By the beginning of the third year, I started saving 10,000 a month (except for large expenses). The rest isn't important; let me talk about my state each year.

In the first year, I was excited to start working, but I was also reckless. I wanted to travel and attend training sessions, earning over 4,000 a month, but I couldn't figure out where all my money went. The end result was that I owed my roommate 2,000 yuan, ending that miserable year. I even went to Japan and Wuyuan, among other places.

In the second year, I was a bit more restrained, but I still traveled to Yunnan (with my sister), Hong Kong, and Cambodia, not counting short trips, which added up to quite a bit. Plus, I had to cover my sister's tuition and living expenses. By the time the New Year rolled around, I had saved 20,000. I started to rein in my spending in the first half of the second year and became obsessed with learning Excel.

In the third year, I went to Yunnan again, rode around Qinghai Lake, and visited Xiamen. On weekends, I hiked and rode around Qiandao Lake or went camping by the sea. However, aside from the necessary expenses, my spending wasn't too high because I became obsessed with learning Excel in the second half of the second year, which reduced my expenses and increased my travel. I also wrote a book in the latter half of the year, and I exploded with energy after being silent for too long. After all the fun, I felt I needed to get serious and started my fourth year journey.

P.S. My sister's tuition is 10,000 a year, living expenses are 1,200 a month, plus 1,200 for accommodation, and the cost of train tickets home each year, along with money for new clothes. My mom made me pay this amount to prevent me from spending recklessly, and once my sister graduates, she will give me a lump sum of 100,000.

In the fourth year, at the beginning of the fourth year, I learned a bit and was lucky to take on some freelance work. My salary also increased a bit, and if I worked overtime, I could earn around 14,000 a month, so I saved 10,000. My sister's expenses were 1,200, my rent was 1,000, and then 1,800 was enough for living expenses.

In the first half of the fourth year, I was preparing for an exam, and the exam and training fees totaled over 6,000. During that half year, my other expenses were relatively low. For such an expensive exam, I worked hard to prepare. Because of my hard work, I did gain a bit; the training institution's teacher even took photos of us during class for promotion, and I made quite a few ambitious friends. Because besides the exam, I had to work and do freelance work, I was extremely busy, with no time to go out. In the second half of 2013, I managed to fulfill a small dream of mine by cycling around Qinghai Lake, so whenever someone invited me to do something, I would refuse.

In the middle of the fourth year, my book was published, and in a month, it sold over 2,500 copies, and I received about 3,500 from the settlement.

Now it's the last few months of the fourth year. This year, I had a few significant expenses: one was learning to drive, costing about 7,000, then dental correction, about 8,000, and since my skin wasn't good, I decided to make a complete change, so I got a card at a beauty salon for 4,500. At the beginning of the year, my sister came to Shanghai, and we bought new clothes for the New Year, which was a bit crazy. Fortunately, I had a double salary at the end of the year, so I managed to get through it while maintaining a monthly saving of 10,000. In the second month, due to unexpected income, I managed to balance my income and expenses, but there was no surplus left, sigh~

In March, I went hiking and cycled around Chongming Island. Local trips were sorted out, but international travel had to rely on the company.

Learning about finance: This year, I started paying attention to various financial management topics and realized that I was also growing. At least, I am not someone who spends money recklessly by nature, and I also have a money-conscious mom. All my money is in my mom's hands, and when I do business with friends, I earn a small profit, and when it matures, I can directly renew it. My sister will graduate from university next year, and considering interest and my savings, along with the money my mom prepared for my sister, it should be around 200,000.

In fact, my salary has been steadily increasing, and I have a good reputation in the company. My freelance income is a long-term accumulation, and this freelance work has lasted for seven or eight months. The royalties I earned were from my year of destiny, where I felt I had to do something, which was also a result of my previous year's accumulation, allowing me to seize this opportunity. Royalties are based on royalties, so as long as the book is still selling, I will basically have a steady income. However, the lifespan of this book should only be three to five years. (Hehe, I should write a new book next year.)

I always wanted to manage my finances myself rather than being forced by my mom to save money. This month, I paid off my credit card and rent, starting from zero.

I often have moments of reckless spending, but as a Taurus, there are limits to my recklessness. For example, when I receive royalties, after I force myself to save 10,000, I can spend a little freely, and anything goes.

Regarding annual travel, my consistent thought has been that even if I have no money for food, I must travel. In fact, traveling can be quite economical. For instance, cycling around Qinghai Lake, I took five days off, and the total trip lasted nine days, including the round-trip train fare, which cost about 1,900. However, I fulfilled a small dream of mine. As for Hong Kong, I stayed at a friend's house, which saved me a lot of money. It was also nine days: four days in Hong Kong, one day in Macau, two days in Shenzhen, and two days in Guangzhou. I enjoy such transitions, seeing different cities and different people, observing how they grow in different environments and how people live in another world. I love reading; books contain many worlds, but if I don't place myself in such a world, it's hard to experience that feeling. Perhaps I really can't let go; I can't just drop everything and run to another city to live, but at least I can leave my footprints in these places and observe others' worlds.

P.S.: Last year, I also realized that Taobao is a bottomless pit. In fact, spending a little money to buy a bunch of things has lowered my quality of life. Most of my favorite clothes are bought in malls, while many things bought on Taobao have been left untouched.

Supplement: I saw a friend asking how to get freelance work, and it resonated with me. I didn't know before, but when you become strong in a certain field, it naturally becomes easier. Although I am still weaker than many, I have made significant progress compared to my past self~~

I studied Excel for half a year, Word for a month, and then started teaching online for half a year. I happened to help the site owner with something, and when the forum wanted to publish a book, they said I could join because I had helped a lot. However, publishing a book doesn't really earn much; most people end up losing money.

I spent over half a year on the forum, and by chance, I helped the site owner solve a moderator's departure issue. At that time, I was in Xiamen, chatting with the site owner until 3 a.m., and we finally reached an agreement!

I studied information security; I have always been good at learning computer software, but I had never studied something so diligently. I used to have a short attention span, so I never accomplished much. However, this is something I have persisted in studying for two years, and I will continue to do so.

At that time, I was so obsessed that while others were watching movies and sleeping at noon, I was watching tutorials, doing homework, and solving problems. I can hardly imagine what I was like back then. After going through such a small transformation, I feel that those motivational stories are indeed true; it's just that the level of effort and the platforms differ!

2. How Can Young Professionals Manage Their Finances?#

This is a very interesting question, and I believe most young people have such doubts. In our process of reading Jianqi's financial advice, we are also constantly exploring what our first step in financial management should be... This is a very interesting question, and I believe most young people have such doubts. In our process of reading Jianqi's financial advice, we are also constantly exploring what our first step in financial management should be...

This is a very interesting question, and I believe most young people have such doubts.

In our process of reading Jianqi's financial advice, we are also constantly exploring how to take our first step in financial management. Below are some discussion results, and you are welcome to try it out; we also welcome you to share your insights after trying!

First, you need to have clear and quantifiable goals, which will be your motivation to persist in the future. After the initial novelty wears off, we will find that financial management is a long-term, sometimes even somewhat tedious task because in this process, you need to continuously learn, practice, and face certain failures. You need to have the motivation to stand up, dust yourself off, and keep moving forward.

We see that the most frequently mentioned goals are: broadly speaking, it could be achieving xx yuan in investable assets by the age of xx, reaching financial freedom; starting your own business in xx years, accumulating xx yuan for startup capital; or on a smaller scale, a girl with a monthly salary of 3,000 saying she hopes to take her grandfather on a plane for a domestic trip within two years, costing around 8,000 to 10,000, or a young man with an annual salary of 100,000 saying he hopes to travel in Europe for half a year within five years, costing around 180,000.

So, first think clearly about what you hope to achieve by when, and how much money you need to accomplish this (of course, it should exceed what you can easily afford).

Second, clarify your financial situation, your current asset-liability situation, and your expenditure-saving situation. Just like a marathon, you know where the goal is, how far it is, and how long you hope to take to complete it. Next, you need to see how far you have already run and what your running speed is.

Your current asset-liability status is equivalent to how far you have run in this marathon. Your expenditure-saving situation is your running speed.

An important action here is to keep accounts. So many times, we say that keeping accounts is the first step in financial management. Several popular accounting apps on the market are quite good; you can use one based on your habits and, through at least three months of continuous accounting, clarify the above issues.

Third, based on the self-check above, formulate your financial investment plan.

After self-checking, if you find the goal is too easy or too difficult to achieve, adjust the amount or completion time.

If you find that the goal cannot be achieved based on your current income and expenditure situation, but if you can optimize income and expenditure, there is still hope for completion? Then calculate how much you need to increase your income and reduce your expenditure to achieve your goal. Then look for ways to achieve it.

Increasing income may come from salary increases or bonuses, possibly within the same position, or through promotions or even job changes.

It may also be through adjusting financial investment strategies and combinations to achieve higher returns.

Speaking of this, I want to share a core concept with everyone: for young people, the best investment is always investing in yourself!

In several previous questions, we mentioned that a 5% return on government bonds is not difficult, but achieving a 10% annualized investment return is not an easy task. The time and energy required to achieve this, when your investable funds are below 1 million, results in absolute returns, such as 50,000, which may not be as good as investing your time and energy in self-learning and improving your skills, leading to a salary increase or a promotion.

Previously, we chatted with a senior executive from a listed company, and his advice was that for the vast majority of young people, the income growth from work in the first five years of starting a job is more important than the income growth from investment and financial management. Therefore, balancing investing in yourself and managing that meager principal is a more suitable approach.

In youth, focusing on self-improvement while accumulating capital is a more appropriate method.

Fourth: How to start practical financial management operations? In your question, you asked whether to hand over to others (funds) or learn yourself, and if learning yourself, what aspects to study. This question itself is worth discussing.

Even if you plan to invest all your money in funds, do you not need to learn anything? Do you know the different types of funds? Do you know how to select funds? Do you know that in China, public fund companies make money through management fees (so scale is the most important), rather than profit status (but this can affect long-term rankings, thus affecting future scale)? Who is responsible for your investment results? In the end, only you! So, of course, you need to learn, whether you ultimately decide to hand over your money to funds for management or do it yourself.

If I were to directly answer your question about a financial management plan, you at least need to learn how to optimize daily consumption; knowledge of credit cards will be very helpful; you need to learn how to choose a suitable insurance plan, understand what social security you already have, and then improve your and your family's commercial insurance; then learn which financial management methods are relatively safer, more convenient, and can yield returns exceeding the inflation rate without taking too much of your time and energy, so that your assets at least do not depreciate. For example, government bonds, money market funds, bonds, bond funds, bank wealth management, etc. After learning all these, you can consider learning about higher-risk, higher-return varieties and conduct small-scale trials to accumulate experience.

Finally, let me give a simplified example:

Assuming we have a friend who has been dreaming of traveling to outer space for five years. From the information gathered so far, a space trip costs about 600,000. He currently has savings of 100,000 in a fixed deposit. His annual income is 300,000, and his annual expenditure is about 250,000, leaving him with a savings of 50,000. If this is the case, he can save a maximum of 387,000 in five years, which is still 223,000 short.

What to do?

Through accounting practice, he finds that he has been spending at least 20,000 too much each year (he should be able to achieve a savings rate of 40% or more).

He expects to be promoted this year, estimating that his annual salary will increase by 30,000 each year.

He plans to transfer the money in his fixed deposit to a bank wealth management product with a return of around 5%.

In this case, after five years, he is expected to save up to 680,000, achieving his grand ambition without pressure, and leaving 80,000 as a buffer to solve urgent problems.

Is it Unreliable for Salary Workers to Invest and Get Rich?#

Is it unreliable for salary workers to invest and get rich? Let's discuss this topic. Recently, there has been a heated discussion about financial freedom on Xueqiu. From what I see from the investment experts in my circle, if it’s not entrepreneurship, they basically do not support or agree with achieving financial freedom through investment... Let's discuss this topic. Recently, there has been a heated discussion about financial freedom on Xueqiu. From what I see from the investment experts in my circle, if it’s not entrepreneurship, they basically do not support or agree with achieving financial freedom through investment...

Let's discuss this topic. Recently, there has been a heated discussion about financial freedom on Xueqiu. From what I see from the investment experts in my circle, if it’s not entrepreneurship, they basically do not support or agree with achieving financial freedom through investment, believing the probability is low and the possibility is small. Instead, they suggest that through work, with a bit of effort, one can become an outstanding individual, earning a salary of over a hundred thousand, and year-end bonuses can also reach several tens of thousands, which seems relatively easier to achieve.

I can understand the good intentions of the experts in my circle. However, from my practical perspective, it is not easy to climb the ladder through work, stepping on others to become a superior person, or to navigate the complexities of interests to become a top player in the industry, enjoying high salaries and living in big houses. Even in high-cost, high-consumption Shenzhen, the proportion of the total population that can earn several hundred thousand a year is extremely small. This truly represents the elite class.

For ordinary people, the clean income that can be achieved through hard work, adjusted for inflation, is now only about 300,000 to 400,000 a year. Correspondingly, this is the clear income of government officials at the county level—ordinary civil servants. With hard work and a bit of luck, they can still hold on to their jobs until retirement. Of course, many people cannot even reach this level.

From my observations, excluding those who have succeeded in entrepreneurship, the vast majority of people I know with assets exceeding ten million have achieved this through investment. Many ordinary office workers have a source of savings from their income, whether from accepting original shares during task assignments, being introduced to the stock market and becoming shareholders, or participating in some projects; or they bought houses when prices were low or were marketed into buying houses, and then improved their living conditions by buying larger houses, or bought school district houses for their children...

Shenzhen people have a strong investment awareness; they have some financial management knowledge. Where there are high returns, money flows there. The places where money is drawn in also align with the direction of social development. Work is not lost; buy a house when it’s time to buy a house, trade stocks when it’s time to trade stocks, save gold when it’s time to save gold, and invest when it’s time to invest. If you get caught, you get caught; in the end, it’s all about letting cash flow become assets, and assets generate cash flow, continuously rolling from small to large, from little to more...

Of course, the above examples do not mean that buying a house now is the right time or that it is suitable to invest in anything. In terms of investment philosophy, one should still form a basic investment view. At least, it should be expressed that it is clear that now is not a good time to invest in buying houses. Currently, among the office workers around me, young, middle-aged, and elderly all have their own preferences for financial products. For example, in the stock market, it is often easy to find stocks worth several tens of thousands, several hundreds of thousands, or even millions. Of course, there are many "investors" who are stuck, but they are adamant about not selling unless they see profits. Being stuck is just being stuck; this is a bear market, isn't it?

The benefit of ordinary salary workers sticking to investing is that they can continue to work and earn their salaries, eat and drink as they please. The money is under their control, and the time is also theirs. The invested assets will yield some dividends, rent, dividends, or other returns every year. If it drops, it drops? You can afford to wait. If you have spare money, you might even add a bit more.

You don’t manage your finances, and your finances won’t manage you. This saying still holds true. From what I have seen, the asset appreciation process of many ordinary salary workers in Shenzhen actually only has a basic cost-benefit ratio concept, but it is precisely like this, persisting in investing, exploring in practice, participating in investments, or sharing the dividends of the entire social reform and development.

With an asset scale of over ten million, the cash flow generated by the assets is enough to sustain life. This may also be a basic form of financial freedom. Of course, those with ten million in assets still have to work, those who are just getting by will continue to do so, and those who enjoy life will enjoy life. If they rely solely on their salaries, let alone themselves, even their leaders, or even their leaders' leaders' salaries, accumulated over decades, would not be enough to reach this number.

Indeed, this is an opportunity given by the development of the times. This era is so wonderful; why miss it? In Shenzhen, many ordinary salary workers dare to invest and try, and then, by their forties, they have achieved or realized what is called "financial freedom" in terms of asset standards.

Society is developing forward; in a great era, there are great opportunities. Is the feast of the capital market really not suitable for salary workers?!

Continuing to share in the morning. Last night I shared some observations, and I will continue to share my feelings or experiences. I haven't organized it, so I will use the "Baiyun Body" style, writing as I think of it. Please forgive any logical inconsistencies.

1. In a great era, there are great opportunities. Investing is a relatively good way to participate in and share the overall development results of the economy and society. We do not need to be self-restricted, missing out on the capital feast as spectators.

2. Overall, this is the era of capital. The Chinese are generally very diligent, with a strong saving consciousness. But looking at Hong Kong, one can feel that becoming a superior person or an elite in the workplace is still a very small number. However, among the same group of office workers, those with investment and financial management awareness and those without this awareness and planning will have a significant difference in living standards after one or two decades, especially during retirement. Hong Kong has a high average income, and the social security system is very complete, but even so, after working a lifetime, some people can only rely on limited pensions to fight against inflation, leading to a relatively frugal life. "Christmas Bell, buy HSBC," ordinary Hong Kong people who dare to participate in the capital market, after experiencing the baptism of capital, also generally have a basic investment view, where value rules become dominant, and high-quality blue chips are long favored. In such an environment, those who persist over the long term generally have a certain capital accumulation. Therefore, many elderly women who have never made big money in their lives have considerable wealth and enjoy their old age peacefully, which is the result of long-term investment accumulation.

3. Having investment and financial management awareness and not having it makes a big difference. Therefore, appropriate participation is necessary. Moreover, early participation is really not a big deal. There is no need to exclude investment opportunities outside of work. In a developed market economy, following the returns, the flow of money often aligns with the trends of social development.

4. Whether in work or investment, it is not either/or; there is no need to absolutely separate the two. Both have different paths to realization, but both aim to live better, to make oneself and one's family happier, and to enjoy dignity and respect.

5. Of course, when salary workers participate in investments, they must recognize their characteristics as salary workers or small investors. Life is fundamental; work is also important. Do not gamble, do not risk your entire fortune, do not gamble with your life; this requires a necessary risk awareness. Investments should still be made with surplus funds from living expenses, thus being more long-term, safe, and stable; the pursuit of returns should focus on relative certainty, with steady streams of income and long-term persistence yielding considerable results.

6. Ordinary investors can also do well in investing; the key is to form a relatively correct value view and an investment system that can adapt to the market. Then, persist, adjust, evolve, and improve appropriately. — Once again, salary workers should grit their teeth and do what needs to be done when the time comes (group following is not about chasing high prices at the top), and they will always be able to share the glory when the tide rises.

7. Salary workers do not seek to gamble everything for overnight wealth. Over the long term, there are always many investment opportunities. They are not limited to any one type in the housing market or stock market. Each has its own path, and each has its own practice.

8. Ordinary salary workers, regardless of which type of investment they participate in, must be clear that investment is indeed about buying assets, which likely has relatively certain returns and a suitable cost-benefit ratio. Of course, it is also necessary to understand that work is still the basic guarantee of life; a continuous cash flow is really too important for investment.

9. Do not be particularly afraid of making mistakes. Many people who invested in real estate in Shenzhen in the late 1990s suffered from heavy losses, with some even buying at high prices and being stuck for ten years. Of course, from an investment strategy perspective, there are places worth reflecting on. But there is a group of grassroots investors who got stuck but persisted. Even if the house is stuck, there is still rental income. Then, just leave it there. At worst, you can write off the losses. As long as you continue to invest your spare money, there will always be a place where you can turn your fortunes around. A few years later, they hit the bottom of the real estate market, and then there was more than a decade of real estate bull market. It’s good to learn some lessons while young; this is also a wealth of experience for moving forward. Of course, whether one can turn lessons into wealth also depends on individual cultivation.

10. The advantage of salary workers investing lies in their leisure, freedom, flexibility, and long-term nature. There is no need to risk everything, no need to fight for life, and there is no need to compete with others. For the market or the big players, or other so-called main forces, persist in arming yourself with investment concepts, uphold your values, and earn money that you can understand. Let them be strong; let them be crazy. Persist in investing, participate, share the dividends of development, and the wheel of fortune will eventually turn to my home. Then, do what needs to be done. Isn’t that good?!

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Continuation Two: I’m back, continuing to share.

The topic of financial freedom can indeed easily spark heated discussions. Also discussing this topic is not to refute or prove anything, but to illustrate that ordinary salary workers can also shine by adapting to the trends of the times, making good investment plans, cherishing wealth opportunities, and daring to participate.

For example, @DAVID Freedom Road shared many low-risk investment methods suitable for salary workers in his teachings. Such opportunities have relatively good certainty, low risk, and decent returns. As long as you pay attention, there are still opportunities.

Let’s talk about what I have seen and felt. The core of this section may be the "participation and sharing" of ordinary salary workers, but it has not been logically sorted out in detail, so please forgive me.

1. Ordinary salary workers, for various reasons, have few opportunities to start businesses, and even fewer succeed. From the perspective of the great era, investment is participation, sharing the dividends of the era's development. From a personal perspective, investment is also a form of entrepreneurial participation, where we invest our own money to support specific people, companies, or units, sharing risks and benefits to some extent.

2. Investing in good companies with good management at a reasonable price can be understood from another angle as investing at a suitable price, or one with a safety margin, in the right people or projects. This is also a relatively suitable way for ordinary salary workers to participate.

3. This society is so open; why should we be self-restricted? The trend of social class solidification is very obvious. A clear overall social feeling is that it is becoming increasingly difficult to rise. Even in Western societies, structural issues are also very evident. However, investment can allow us ordinary salary workers to horizontally participate in social interactions and development.

4. Having dreams means having a future. Work and investment are not contradictory; they can even promote each other. Based on work, one can better understand the opportunities around them; based on investment, one can have a more stable mindset to do their work well. Moreover, we can notice that many salary workers with investment and financial management awareness tend to have a more positive attitude towards life and have more thoughts, expectations, and hopes for their future lives. They also plan well and have good self-control.

5. It is even more interesting that becoming an industry elite is indeed not easy, but it can allow you to create value for the best companies in your industry, thus sharing the opportunities of industry development. Look at Ping An Insurance; it is so excellent that it has long invested in its competitor China Life, sharing the big market cake of the entire insurance industry.

6. In the field of mass investment, whether in the housing market or stock market, it is a relatively equal place. It may be more suitable for ordinary people to achieve asset evolution. For example, in the stock market, there are always plenty of investment opportunities, which are open and public, and there are certain logic or rules. It just depends on whether one can seize and hold onto them. Of course, aside from luck, this requires a relatively complete system, methods that adapt to the market, and a certain level of willpower.

7. Furthermore, investment does not necessarily have to rely on gambling; it is not necessarily zero-sum, nor must it be a life-or-death struggle. Each has its own path, and there are many successful cases of coexisting and sharing over the long term. Buffett's neighbors in his small town may not understand advanced stock investment techniques or basic corporate analysis knowledge, but by supporting Buffett and investing in him, they also achieved wealth evolution. — For ordinary people like us, although we may not become elites in the social class, through investment, standing in the right position, and following the right people,

8. The stock market is not necessarily a place for smart people to battle against foolish ones. Each profession has its own expertise, but the overall intelligence and responsiveness of fund managers are generally higher than that of the average group, yet their investment returns overall are still not as good as index investing. Just as @DAVID Freedom Road shared, this market still has many investment opportunities with strong certainty and stable returns, and there are many low-risk investment methods suitable for salary workers. If you don’t manage your finances, your finances won’t manage you—ask yourself, have you participated?

9. The Hong Kong stock market is a highly developed international professional market. Has this market eliminated ordinary investors who insist on long-term investment? "Christmas Bell, buy HSBC," refers to many elderly amateur investors who insist on value investing and long-term investment, each with their own path, and they are also doing well. In contrast, many speculative professional institutions and professional investors have been eliminated by the market. Therefore, it is not easy to hype up themes and concepts in the Hong Kong market now because it is difficult to fool followers.

10. Finally, what I want to say is that money can provide financial security for a dignified and decent life; however, a happy life is not necessarily guaranteed by money.

Continuation Three: Concise Version

The above three sections are densely packed with text, repetitive and verbose, and I guess many people find it tiring to read (perhaps the original, authentic version has its own significance). It does not conform to the modern fast-reading characteristics, so finally, I will post a concise version.

In a great era, there are great opportunities. Investment, from a macro trend perspective, is a relatively good way to participate in and share the overall development results of the economy and society. We should understand, accept, and participate with an open mind; from a personal perspective, investing with our own input is also a way to participate in social entrepreneurship, support development, and share the dividends brought by the growth or development of enterprises, achieving the preservation and appreciation of personal assets in this process. Participation and sharing are one of the rules that drive economic and social development.

Financial management is also a form of planning and self-control in life. If you don’t manage your finances, your finances won’t manage you. For the ordinary public, having a life plan versus not having one will make a significant difference as time goes on. In this process, financial freedom is just a goal; what is important is that we can participate with an open attitude, adapt to the trends of the times, either improve ourselves or stand in the right position with the right people, achieving asset appreciation while providing relatively good financial security for improving our own and our family's lives, thus avoiding the pressure of having to bear financial burdens.

Let’s strive for financial freedom, even if it is just a goal. But a life with dreams is always full of hope. Recognize yourself, prioritize life, work, invest, and improve without gambling, without risking your fortune, without gambling with your life, using surplus funds from living expenses to persist in investing, focusing on certainty, emphasizing cost-benefit ratios, and maintaining long-term, safe, and stable investments. Steady streams of income and long-term persistence will yield considerable results. Even we salary workers can achieve this. Let’s work hard for freedom, just like the experiences of the pioneers: there are still more wonderful worlds and lives waiting for us to appreciate and experience.

A Simple and Understandable Guide to the Five Insurances and One Fund#

I once heard a friend from Shanghai say that after giving birth, the subsidies and social security amounted to several tens of thousands, which made me see the benefits of social security in a new light.
So, take three minutes to understand what kind of protection you should enjoy, and then read the recommended extended reading articles to fully understand and utilize the existing social security system. This is also a good way to live a better life while being frugal!

Author: Jianqi's financial reading partner, Misu

Hello everyone, we are the family of the five insurances and one fund. In the eyes of many people, we are "mysterious beauty," seemingly useful, but not quite clear on how to use them.

The state has done us this favor, so everyone should pay attention to their own interests! Let us "recommend ourselves" and introduce ourselves.

According to legal regulations, companies should pay for our five insurances and one fund.

1. What are the five insurances and one fund? When can they come to your bowl?

(1) Big Brother: Pension Insurance

As the name suggests, when you retire and start entering old age, I will come to your bowl! However, many articles from Jianqi's financial reading have told you not to overestimate my ability. Generally speaking, after several years of inflation, relying solely on the retirement salary I provide to maintain your living standards is not feasible.

In addition, everyone must pay attention to accumulating pension insurance for at least 15 years before retirement; otherwise, you will only receive the portion you paid and lose the opportunity to share a piece of the national pension fund.

(2) Second Brother: Medical Insurance

You can find me for daily medical treatment and medication. In addition, if your medical expenses exceed a certain amount while hospitalized within the specified range, you can also enjoy medical insurance reimbursement.

Moreover, everyone must pay attention to:

1. Medical insurance will no longer be available three months after payments stop, and after resuming payments, you must pay continuously for six months to enjoy hospitalization reimbursement and other medical insurance benefits again. Therefore, those who have not paid medical insurance for a long time are advised to pay social security personally or purchase a commercial medical insurance policy.

(The information pushed on WeChat that medical insurance stops being available after the 15th of the following month after stopping payments is incorrect.)

2. Currently, many places require that a certain number of years (for example, 20 years) of medical insurance must be accumulated before retirement to enjoy medical insurance benefits. In some regions, to enjoy social security, you must also accumulate a certain period of medical insurance in that area. For example, in Shenzhen, you must meet the conditions of accumulating medical insurance for 25 years and paying social security in Shenzhen for 15 years to enjoy medical insurance benefits after retirement.

(3) Third Sister: Maternity Insurance

When you give birth (for females) or your wife gives birth (for males, yes, males also have maternity insurance and maternity leave), I will come to your bowl. You can enjoy maternity medical expenses, maternity allowances, and maternity leave benefits.

Everyone must have paid maternity insurance for at least one year at their workplace to enjoy this benefit. In addition, if you are wealthy and give birth in a private hospital, you will not be able to enjoy maternity insurance.

(4) Fourth Brother: Unemployment Insurance

As the name suggests, you can find me when you are unemployed. Of course, I know you don't want to find me. The conditions for receiving unemployment insurance are not easy:

1. Like maternity insurance, you and your unit must have paid unemployment insurance for at least one year before unemployment;

2. You must be unemployed for reasons beyond your control, so voluntarily resigning does not qualify for benefits;

3. You must register for unemployment within 60 days after becoming unemployed.

Even if you remain unemployed, you cannot receive unemployment insurance indefinitely; there is a time limit, and you can receive it for a maximum of two years. You will also be continuously required to participate in re-employment training. Finally, the amount of unemployment benefits you can receive each month is also quite meager, so everyone should work hard and be self-reliant.

(5) Fifth Brother: Work Injury Insurance

Although you may not like me, as a member of the social security family, I still want to introduce myself. When a worker suffers an accidental injury or contracts an occupational disease during work, temporarily or permanently losing their ability to work, or unfortunately dies, they can come to me. I will provide material compensation to the worker, and the dependents of the worker who died due to work will also receive unemployment insurance compensation.

One strange point is that for work-related deaths, the worker must die within 48 hours after being rescued to be covered by work injury insurance...

(6) Little Sister: Housing Provident Fund

I am the little sister in the family of five insurances and one fund—the Housing Provident Fund, a beloved darling. You can take me home when buying a house, renovating, renting, or even when leaving or retiring. In addition, paying into the Housing Provident Fund allows you to apply for a housing provident fund loan at a very favorable interest rate, which is great.

2. How are the five insurances and one fund paid? Who pockets the money?

The specific amounts paid for social security vary by region, but the overall approach is similar, roughly as follows:

(1) Pension Insurance:

How to pay:

1. Individuals pay 8% of the local average wage of employees from the previous year. If your salary is higher than this average wage, it is calculated based on your average wage, which all goes into your personal account (you start receiving it upon retirement);

2. The unit pays 20%, which goes into the pooled account, meaning that the unit's contribution does not necessarily mean you will receive more in the future.

How much to receive:

For those who started working after 1997, the monthly pension after retirement is calculated by adding two parts:

1. Basic pension: determined based on the average wage of employees in the locality at the time of retirement and your years of contribution (from the pooled account);

2. Personal pension: determined based on your personal contribution amount and your retirement age (from your personal account).

(2) Medical Insurance

How to pay: Individuals pay about 2% + a small amount (generally a few yuan) for major illness insurance, while units pay around 8%-10%.

How much to receive:

1. All medical insurance paid by individuals and the portion paid by the unit (for example, in some places, it is 30%) is returned to the individual's medical insurance card each year, which can be used to buy medicine and see a doctor.

2. Medical expenses that meet certain conditions can be reimbursed from the pooled fund.

(3) Maternity Insurance

How to pay: All paid by the enterprise, with the enterprise's contribution generally around 0.5%-1%.

How much to receive: Maternity-related examination fees, delivery fees, surgical fees, hospitalization fees, and medication can be reimbursed by maternity insurance. However, medical service fees and medication costs that exceed the stipulated amount cannot be reimbursed. In addition, medical expenses due to diseases caused by childbirth can also be reimbursed by maternity insurance.

Reference:

(4) Unemployment Insurance

How to pay: Individuals pay 0.2%-1%, while units pay around 2%, with variations by region.

How much to receive: Unemployment insurance is generally set based on the local minimum living guarantee level, and the amount you can receive varies based on your work and the number of years you have paid unemployment insurance, ranging from 3 to 24 months.

(5) Work Injury Insurance

How to pay: All paid by the unit, with the contribution rate varying based on the industry’s risk level, generally between 0.5%-2%.

How much to receive: Compensation and reimbursement rates vary based on the severity of the work injury.

(6) Provident Fund

How to pay: Both individuals and units contribute 12% (12% + 12%).

How much to receive: All contributions from individuals and units go into the personal account, which can all be claimed by us, which is great. However, if the provident fund lies dormant in the account for a long time, the loss of interest can be quite frustrating.

3. Other Information

4. Local social security bureau phone numbers: Area code + 12333

It is strongly recommended that everyone ask their unit's human resources department and the local social security bureau for any social security-related questions. This is because the situation regarding the five insurances and one fund varies significantly by region, and calling is the most convenient and accurate way to inquire.

How to Achieve Financial Freedom#

Let’s talk about financial freedom again! Recently, I chatted with a few friends and saw too many people placing too much hope on getting rich through the stock market, treating it as the only path to financial freedom. Although a large part of our family's wealth... Recently, I chatted with a few friends and saw too many people placing too much hope on getting rich through the stock market, treating it as the only path to financial freedom. Although a large part of our family's wealth...

Recently, I chatted with a few friends and saw too many people placing too much hope on getting rich through the stock market, treating it as the only path to financial freedom. Although a large part of our family's wealth comes from the stock market, and we have achieved basic financial freedom through it, I still want to talk about a new perspective on financial freedom. Everyone has a dream of financial freedom, hoping to have the ability to retire early before the age of 35 or 40 and live the life they want. Of course, in any country, only a few can achieve this. There are roughly the following methods to achieve this goal.

1. Entrepreneurship
   I believe this is the fastest way to achieve financial freedom—entrepreneurship. Microsoft CEO Bill Gates was worth 2.5 billion dollars at the age of 35, Google CEO Larry Page was worth 16.6 billion dollars at the age of 35, and Facebook CEO Mark Zuckerberg was worth nearly 30 billion dollars at the age of 30. They achieved financial freedom at rocket speed. Even the best investors cannot compare to them, while Warren Buffett only approached such a level after the age of 60.
   The same goes for China; Tencent's Ma Huateng, Shanda's Chen Tianqiao, and JD's Liu Qiangdong all achieved financial freedom before the age of 35. Jumei Youpin's Chen Ou was worth over 1 billion dollars by the age of 30.
   Of course, the ones mentioned above are the top entrepreneurs, and there are many average entrepreneurs who may not go public but get acquired by a listed company, instantly becoming worth several million or even hundreds of millions.

2. Join a Startup
   Even if you are not the entrepreneur, if you are among the top 100 employees of these companies, you can also achieve financial freedom before the age of 35.

3. Investment

Assuming financial freedom requires 5 million, a student graduating at 22 saves 500,000 after three years of work, and then invests for ten years with a tenfold return, he will have 5 million by 35. If the initial capital is only 100,000, then he must achieve a fiftyfold return in ten years.

Compared to the first two methods, achieving financial freedom through the stock market is the most difficult, especially for young people who choose to invest professionally too early.

From my own experience, I started working in 2002, and after graduation, my spouse and I had relatively high salaries. Even so, it took nearly ten years to reach financial freedom. To be honest, I am not a successful person; when I was young, I didn't work very hard and always thought I could rely on investment for financial freedom. It wasn't until 2010 that I realized I couldn't neglect my career. I worked hard, and it really paid off; my salary doubled in the next two years. However, it was a bit late, and due to my neglect of investment during that time, I suffered significant losses in 2011, losing several times my annual salary. It was precisely because my asset scale was large enough that I decided to live freely afterward, relying on low-risk investments to ensure that my family could live without worries even without cash flow from work. On the other hand, I liberated myself to engage in some high-risk industries. The high risk I refer to means giving up a stable job with a 300,000 annual salary to engage in uncertain future endeavors that may yield no returns but could change my life, such as spending time writing a book titled "The Path of Low-Risk Investment."

I have some talent in stock market investment, achieving a twelvefold return over ten years. However, even so, those mid-level employees who received stock options from startups still outperform me. This is not a comparison I want to make; it is merely a factual statement. Therefore, for young graduates, even if you aspire to financial freedom, there is no need to walk this path exclusively.

Why do I advocate low-risk investments? Because low-risk investments can best balance investment and real industry. If I had always engaged in high-risk investments, my family’s assets would have been on a roller coaster. I can assure you that I would have lost interest in working. It is precisely because I engage in low-risk investments that although I have not excelled in my eleven years in the workplace, I have not fallen behind others either.

Therefore, I truly advise young people to focus their energy on their careers and engage in low-risk investments, which makes it easier to achieve financial freedom. Of course, if you believe you have exceptional talent, you can become a professional investor. However, I believe that excellent professional investors should engage in private equity, increasing their wealth leverage by helping others make money, which is akin to entrepreneurs seeking angel investments.

If you have little capital and still hope to achieve financial freedom solely by rolling your own money, it’s time to wake up. In 2007, I saw many stock market gurus, some turning 20,000 yuan into 600,000, achieving a 30-fold return in a year. Impressive, right? But what does that mean? It’s just someone else’s annual bonus.

===============================================
Below are some of my thoughts on financial freedom from two years ago, for your reference.
I am a professional investor web link

Talking about financial freedom [web link](http://blog.sina.com.cn/s/blog_4dd330190100y7y9.html "http://blog.sina.com.cn/s/blog_4dd330190100y7y9.html”)

The Secrets of Installment Payments You Should Know!#

Interest rate traps? The secrets of installment payments you should know! Ring ring ring~~ "Hello, Jianqi, this is Lele! Long time no see!" The last time we met to discuss financial management was months ago. After the Spring Festival, everyone is getting chubby and wants to plan another foodie journey! Arriving at the legendary X cuisine, Jianqi and Lele chose the sea bream in the pool, sitting on a big boat, enjoying fresh sashimi while chatting.

Jianqi's Financial Reading
(WeChat ID: jane7ducai)
Original and easy to understand!

"Jianqi, I have a wealthy friend who is very interested in the recently praised Tesla, which costs 704,000 yuan in China, and he is preparing to buy it! So cool!"

Jianqi sighed while eating, "Indeed, he is a rich man! However, Tesla is really generous, allowing Chinese and American rich people to enjoy the same price, only increasing transportation and tax costs~"

"Well, but he has friends suggesting he take a loan from XX company with a 5% interest rate for three years. You see, XX Bao has over 6% returns now, so keeping the money for investment would be great!" Lele gestured with his fingers, waiting for Jianqi's response.

"Don't rush; no company will give you benefits for free. Tell me the loan details."

The loan company requires:

Loan principal of 734,000 yuan, annual interest rate of 5%, to be paid off in three years.

The monthly repayment amount is (734,000 + 734,000 × 5% × 3) ÷ 36

= 23,447 yuan

Haha, do you think this is a loan with a real annual interest rate of 5%? Too naive!

Do you remember the content of the sixth lesson of Jianqi's free public course: various rates of return (everyone can search for "Jianqi" on the platform)? We taught a formula called IRR (internal rate of return), which can conveniently yield the internal rate of return that makes a series of cash flows' net present value zero in Excel. If you want to know the specific calculation principles and formulas, you can search for it yourself!

Now, let’s assume you are the loan company lending to the wealthy. You initially pay 734,000 yuan (input -734,000 in cell A1), and then you will receive 23,447 yuan for 36 periods. Input this series of numbers in the spreadsheet, and in another cell, input = irr(A1), press enter, and you will find that the monthly actual yield of the loan company is 0.78%! Converted to annualized yield, it is 0.78% * 12 = 9.31%!

The yield of the loan company is actually the cost of funds for the wealthy, which is not 5%, but 9.31%! XX Bao does not have such high returns!

"Ah?!" Lele's eyes widened, and his mouth couldn't close. "Why is that?"

"Actually, this is similar to the difference between equal principal and equal installment repayment. Equal principal means that each repayment reduces the principal amount on which interest is calculated, while equal installment means that interest is calculated on the total principal throughout the term. Therefore, equal principal is a repayment method with less interest!"

"I see, it seems I need to pay attention to what repayment method is more cost-effective when I take out loans in the future!"

"Yes," Jianqi continued to advise Lele, "especially since many people like to use the installment payment function of credit cards, thinking that a 0.66% handling fee is negligible, which amounts to 7.92% annually, just a little higher than the returns from money market funds. This kind of thinking is fundamentally wrong!

According to our previous calculations, if you choose to pay back 10,000 yuan in 12 installments to the bank, what is the actual annualized interest rate?

Loan principal: 10,000 yuan

Each installment repayment amount is 10,000/12 + 10,000 × 0.66%

= 899.33 yuan

Referring to the official website of China Merchants Bank:

My bank provides cardholders with various installment options, with the handling fee rate for 12 installments being 0.66%.

Each installment handling fee = Total installment amount × Handling fee rate per installment.

Using the formula, the actual monthly interest rate is 1.19%, and the annual interest rate is 14.31%!"

Friends, after seeing this, will you still easily choose to use credit card bill installments?

The Insurance Anti-Deception Manual#

Insurance Anti-Deception "Script" Manual Original link: web link Insurance complaints are endless, largely stemming from the "deception" behavior of insurance marketers during the sales process. In the internal training of insurance companies, a set of "scripts" is often provided to tell marketers how to guide customers' inquiries in a way that benefits the insurance company. Agents trained in this way can easily mislead consumers, making them easy victims of "deception."

Therefore, policyholders should return the favor.

How to make agents feel you are knowledgeable about insurance without knowing too much about it requires a set of "scripts." This "anti-deception" script manual aims to help policyholders create a professional image in the battle of wits with insurance marketers, letting them know that their sales target is not so easy to "deceive."

Script 1: Inquire about the Business License Number

When a stranger insurance marketer tries to sell you insurance products, you might as well ask for their business license number first and say, "I need to check your credit record before making a decision."

The so-called business license is the "insurance marketing agent's business license," which is a necessary certificate for insurance marketers, containing basic information about the individual and the company they belong to. Therefore, when encountering an insurance marketer, it is advisable to ask them to show the original business license to ensure they are genuinely qualified to sell insurance; after confirming this, you can also ask for their business card and ensure that the business license number is printed on it for future reference.

Once you have the business license number, policyholders can visit web link to check their credit record and see if they have any bad records.

Although the business license is a necessary document for every insurance marketer, most policyholders are unaware of its existence. Therefore, when you ask for this number, you can take the initiative and let the other party know that you are not an insurance novice, and the request to check the credit record will further indicate that you are not entirely ignorant of the monitoring and complaint mechanisms for agents.

In fact, reporters have received calls from insurance marketers trying to sell over the phone, and just by asking, "What is your business license number?" the other party immediately knew they had hit a wall and hurriedly hung up, showing the effectiveness of this line.

Script 2: Indicate You Want to Record the Entire Conversation

Whether encountering bank insurance marketers or door-to-door individual insurance marketers, after asking for the business license number, you might as well express that you have a poor memory and would like to record the conversation for future reference.

In this script manual, this point is undoubtedly a "big killer." Even if you don't use any other scripts, just using this one may be enough to handle the situation smoothly.

Most agents skilled in "deception" rely on verbal misdirection to create illusions about insurance products for policyholders. After all, verbal promises are not binding; even if they exaggerate the return rates or favorable redemption conditions during the sales pitch, once the policy is signed and effective, the policyholder has no evidence to complain about such "deception."

However, once the policyholder records the entire conversation, it means that even if they are still deceived, they will have evidence for future complaints. In such a case, marketers will have to weigh their words carefully, as they may not dare to mislead recklessly. Of course, honest and reliable marketers will not fear being recorded, while those who resist this are likely to have ulterior motives—such agents should naturally be avoided.

Script 3: Request Product Information

Marketers rely on their words to sell, but their words are the least reliable. In actual business, many agents often like to verbally introduce certain insurance products, at most writing a few numbers on a piece of paper to help you understand. Unbeknownst to them, this process creates room for deception. Verbal promises are not binding, but a few numbers on a piece of paper also cannot serve as evidence because the key details that affect the quality of insurance products are often not written down by agents skilled in deception.

Therefore, it is essential to request official promotional materials issued by the insurance company from the agent. Additionally, you may also check the printing quality and design style of the pamphlet to determine whether it is a "knockoff" printed by the agent. Official promotional materials issued by the insurance company are supervised by regulatory authorities, and the information is generally reliable. However, materials printed by agents themselves often only highlight the positives while avoiding any unfavorable sensitive information.

Thus, when being sold insurance products, it is crucial to request official promotional materials for careful study. Without reliable written descriptions, do not easily trust the verbal expressions of marketers.

Script 4: Emphasize the Right to a Cooling-off Period

During communication with insurance agents, policyholders might as well emphasize their "cooling-off period" rights. For example, you can say, "Please explain this insurance clearly; what if I buy it and find it is not the product I need, and then I have to return it during the cooling-off period? Wouldn't that be a hassle for you?"

The so-called cooling-off period refers to the period within ten days after the policyholder and the insured receive the policy, during which, for any reason, they can unconditionally request the insurance company to cancel the policy. Life insurance products with a term of more than one year grant policyholders the right to a "cooling-off period." For any cancellation during the "cooling-off period," the insurance company only charges a handling fee. This right is something that insurance marketers should inform policyholders about, but in reality, many policyholders are unaware of it. Therefore, by actively emphasizing this right to the agent, you are subtly indicating that you are knowledgeable about insurance, making it clear that you are not easily "deceived."

Of course, the cooling-off right is not just a verbal statement. Even after purchasing a policy, if you have any doubts about the insurance terms or products, do not hesitate to exercise your cooling-off right to cancel the policy—even if you later find out that it is indeed a good product, at worst, you can simply reapply, losing only a small handling fee. If the agent emphasizes that this is a limited-time offer that will soon be discontinued, there is no need to take it seriously. Indeed, some products may have sales deadlines during the sales process, but this does not mean that it is truly a once-in-a-lifetime good product; it is more of a marketing tactic. The number of truly regretful insurance products in the market is very few; based on the reporter's observations, there have only been three or four such products in the past five years.

Script 5: Inquire About the Worst-case Scenario for Cancellation

In recent years, dividend insurance has been a hotspot for complaints, and it is naturally also a heavy area for complaints. The reason is that dividend insurance often has high premiums, and its product structure determines that if it is a premium payment product, canceling the policy within one or two years often results in a loss of 20% to 50% of all premiums, which is evidently unacceptable for many policyholders.

When marketing dividend insurance, agents often only report the positive aspects, emphasizing how attractive the returns are, while neglecting to mention the potential losses that may occur upon cancellation.

Therefore, when dealing with marketers promoting dividend insurance, universal insurance, or investment-linked insurance, it is essential to ask how much premium can be recovered if the policy is canceled within one or two years—generally, this information will also be included in the official promotional materials issued by the insurance company, so it is advisable to compare it with the agent's statements.

Script 6: Inquire About Guaranteed Returns

Still talking about dividend insurance, when agents are "deceiving" you, they often paint a rosy picture of dividend insurance, claiming it is the best alternative to bank deposits. For such "deception," policyholders might as well respond with a consistent approach: remember that the guaranteed return portion of dividend insurance is generally just over 1%, and it is almost impossible to exceed 2%.

When agents promote dividend insurance, you might as well ask how much the guaranteed annual return of this product can provide.

If any agent tells you that this dividend insurance guarantees a return of 4% or even 5% annually, then either they are misleading you by exploiting some clause, or they themselves do not understand this product. In either case, this is evidently not an agent suitable for selling such complex products as dividend insurance, and policyholders should avoid purchasing dividend insurance from them.

Script 7: Emphasize Free Products

Currently, telephone marketing for insurance is becoming increasingly active, and it is not without its "traps." A common tactic is to first offer a seemingly free short-term insurance to existing customers, and then recommend a more expensive insurance product alongside it. Since it is a telephone sale, without written documentation, over time, the person receiving the call may become confused. When the telephone marketer asks if you need this insurance, they are actually asking about the paid insurance, but many people mistakenly think they are being asked about the free insurance and agree.

Therefore, when encountering such telephone marketing, it is advisable to request that they mail you the product information so you can study it carefully before making a decision. Of course, if the marketer continues to push for sales, you might as well say, "I want the free insurance you offer; I don't want any insurance that requires payment," which can easily defuse the insurance company's tactic of offering free products while promoting paid insurance.

P.S.: This article is recommended to be read alongside my previous piece "Cherish Money, Stay Away from Premium Payment Dividend Insurance" (web link), as the anti-deception effect will be better.

15. Six Details to Assess the Reliability of P2P Platforms#

With nearly a thousand P2P online lending platforms, the enticing high-interest returns and dazzling safety promises make today’s investors excited yet hesitant—how to balance risk and return? How to select "reliable" projects for investment? The risks we speak of include platform fraud and running away, as well as borrower fraud and credit risk.

By comparing major P2P platforms, we find that the devil in online lending still hides in the details. In fact, for a seemingly standard P2P website, as long as we pay attention to a few detail-oriented questions, we can eliminate non-compliant platforms through clues.

1. Background of the Platform's Founders and Executives

The background of the platform's founders is crucial, especially for internet finance companies, as their products and risks are still fundamentally financial, but they also leverage internet-style marketing and operations. In their long-term main loan business, banks have accumulated rich risk management experience, so it is essential to have someone in the platform's senior management who has worked in commercial bank credit management for over five years. Without such experience, it is difficult to develop a sense of respect for liquidity and credit risks in loan operations, and if they treat the platform like a regular internet company, the risk of crossing red lines will undoubtedly increase.

Of course, there are even worse cases where there is no introduction of any management team personnel on the platform, only a few photos of team-building activities or busy customer service staff, and the pages are extremely similar to other brand websites; such a makeshift team raises concerns about the platform's technical level and ethical standards. In short, platforms that do not provide information about their CEO/CRO (Chief Risk Officer) are red flags.

2. Recognition in the Investment Community

As non-professional investors, it is not easy to grasp the operational level and development trends of a platform fully, but professional venture capitalists (VCs) have the opportunity to learn about the platform's operational details. Therefore, platforms that have received independent VC investments generally have lower operational risks. Currently, there are seven online platforms in China that have received VC investments.

It should be noted that very few platforms are exempt from VC investment for various reasons.

At the same time, some independent third-party websites (such as Wangdai Home) regularly rank the top 100 platforms based on data collected on launch time, popularity, and yield, which can serve as a reference.

3. Reasonableness of Interest Rates

In China, most enterprises that need to finance through P2P platforms are not high-profit ones—the financial industry's ROE (return on equity) is at most around 20%. Therefore, if the comprehensive cost of loans for small and micro enterprises exceeds 20%, it is difficult to sustain. This critical interest rate translates to about a 15% return for investors.

Recently, it was reported that a certain offline-focused P2P company charged financing clients as high as 50% in comprehensive fees. If true, this would lead to significant "adverse selection," meaning that only clients with poor credit would choose to finance through this platform, increasing the platform's loan risks. This is not only far from the proclaimed "inclusive" finance but also constitutes usury, which cannot receive 100% support from the courts for claims.

Some platforms primarily focus on personal small loans, offering even higher returns to investors. In a situation where the threshold for bank credit cards is already low, with a revolving interest rate of 18% (or lower through installment payments), these financing clients will undoubtedly carry much higher risks than bank credit cards. Data from the central bank indicates that the 90-day overdue rate for some bank credit cards has already exceeded 3%.

4. Transparency of Projects

Whether the destination of investors' funds is reasonably disclosed is a powerful tool for assessing platform risks. Looking back at many platforms that previously ran away, many funds were directed to projects that investors were not aware of, such as self-financing projects, related projects, or even fake projects. Transparent and verifiable projects not only help eliminate fake listings but also provide investors with a clearer understanding of repayment sources and risks.

In contrast, the aforementioned company that is currently under scrutiny could not (or was unwilling to) disclose specific investment projects when forced to "clarify" the situation, making their explanations less convincing. We believe that investments where borrowers are not disclosed and projects are not introduced are suspicious.

From a regulatory perspective, P2P's contribution to the economy is precisely to match those with surplus funds and those in need of financing, especially to provide urgent relief to small and micro enterprises that cannot obtain bank loans. "Point-to-point matching" currently seems to be the recognized method by regulators, so compliant projects should be transparent.

5. Capital Pool

If you ask whether the platform has a self-built capital pool, most will deny it—because regulations clearly state that this is not allowed. However, actions speak louder than words: if a platform can provide a "financial plan" of 20 million, but you do not know who the financing clients or enterprises are, this is essentially a "capital pool"; if a platform can "intelligently bid" to spare you the trouble of selecting projects, it undoubtedly means the platform can control the capital pool.

Why is the capital pool a red line? Strictly speaking, only capital pools that can be controlled and managed by the platform carry risks. Its formation was initially to solve the problem of mismatched timeframes; under the assumption that projects continuously come in and financing clients can be found, the capital pool can better match the needs of both sides.

However, the risk lies in the fact that if there is a misstep, for example, if the self-owned funds have already been lent out but no subsequent investors are found, the platform will immediately fall into a huge crisis. At the same time, once the platform controls the capital pool, it becomes easier to run away with the funds.

In short, platforms that allow you to invest money at any time to "earn interest" are all operating capital pools.

6. Guarantees and Safety Measures

Guarantee companies are still an indispensable protective factor for platforms in China, but ordinary investors do not understand that the strength of guarantee companies varies greatly, and they face significant risks when compensating, so platforms that say "guarantee upon approval" carry considerable risks. Platforms that cooperate with dozens of guarantee companies will also be affected by their shortcomings. Some P2P companies have very strong group backgrounds; however, upon closer inspection, you may find that the guarantor for the platform's tens of billions in loans is actually a financing guarantee company with a registered capital of only 100 million.

Recently, some state-owned provincial guarantee companies have joined the ranks of P2P guarantees. Most of these guarantee companies have received AA to AA+ ratings from five major rating agencies. Their emergence provides more security for investors.

To give investors a "bank-like" sense of security, a very small number of platforms have taken a different approach and simply named themselves XX BANK. What I never expected was that some people would actually invest in them.

Although non-compliant P2P platforms have gradually begun to be cleaned up, thousands of P2P platforms will not disappear overnight; they will only become more hidden. I hope that through the above methods, investors can quickly eliminate many "unreliable" online lending companies and better protect their wallets.

Professionals Teach You How to Do Good Insurance Planning#

This article is a transcript of an interview with Xueqiu friend "Zhang Yizhen."

Question: What types of insurance should young couples who have just married buy? Should they combine accident insurance with critical illness insurance? By the way, is it better to choose domestic insurance companies or foreign ones? Do you have any good recommendations?
Answer: Accident insurance, then life insurance, then critical illness insurance. I mainly use Taikang.

Question: I am 28 years old, married, and have an 8-month-old child. The insurance situation for both spouses is a Ping An universal insurance policy, with annual premiums of over 4,000 each. The child has an insurance card that includes critical illness, accident disability, and life insurance. Is this configuration reasonable?
Answer: Using a universal policy to add critical illness and life insurance? This is a good idea; just check if the coverage is sufficient. I suggest adding a 500,000 accident insurance policy, which costs less than 300 yuan a year, such as from Taikang or Guotai.

Question: More than a decade ago, a friend of my parents introduced me to buy an accident death insurance policy, with an annual premium of about 1,200 yuan and a coverage of 100,000, which I have to pay for 20 years. I always feel that the money paid is gone, unlike some insurances that return the principal plus a small amount of interest after several years. If I had known, I would have bought the latter, which provides both protection and returns. Is my understanding correct?
Answer: If you choose a return policy, the premium will be several times higher. Essentially, the extra money you pay is used to cover the interest earned to pay your premiums; there are no free lunches.

Question: I have two critical illness insurance policies, one with an annual premium of 10,000 and another with a monthly premium of 1,400... Should I get rid of one? Is it necessary to have two?
Answer: The key is how much coverage you receive. Many return-type policies may have high annual premiums but low coverage. Personally, I think around 300,000 coverage is generally sufficient.

Question: Should I buy insurance for my child or invest the money in financial products? Which is more cost-effective?
Answer: You should first ensure that your parents have sufficient insurance, especially life insurance. If something happens to the parents, the loss of income to care for the child is a significant blow. As for the child, life insurance is not necessarily needed; to put it bluntly, the accidental death of a child does not impact the family's income. Moreover, the insurance regulatory commission has a cap on coverage for children, usually no more than 100,000 in big cities. However, critical illness insurance for children can be purchased. As for whether to choose insurance or financial products, one provides protection while the other is an investment; they cannot be compared!

Question: I am also confused about insurance. Why do I feel that after looking at many financial products, it seems more cost-effective to manage my finances myself?
Answer: You should only buy pure protection-type insurance or high-yield universal insurance sold online. Those dividend or return-type products are indeed not worth it for investors with a certain level of knowledge—either the implied yield is too low, or the actual operation probability is not high.

Question: How should a family of three buy insurance? What is suitable for a couple in their 50s?
Answer: For a couple in their 50s, I believe they should rely on their savings to counter risks. At this point, apart from accident insurance, the rates for life and critical illness insurance become extremely expensive, and the probability of claims increases. Therefore, insurance against accidental risks should be more of a concern for young people, as premiums are