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Zhi Finance » Is financing equal to investment?

Is financing equal to investment?

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In many people’s minds, a phrase that is deeply rooted is investment and financing, but are investment and financing the same thing? Have you seriously thought about the difference between these two words?

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In fact, investment and financing are not the same. Investment refers to the economic behavior of obtaining future investment income by investing certain funds and resources through investment decisions. The most important part of this is investment decision-making, including the following aspects:

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1. Where does the income of the investment object come from?

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2. What are the risks of the investment object?

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3. How to protect benefits and avoid risks?

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4. How to allocate investment funds?

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It can be seen that an investment is both predictable and dynamic, and the more comprehensive you know about the investment object, the easier it is to achieve the goal.

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What is financial management? As the name implies, it is to take care of your own property, which is also what we often call asset allocation. Your funds can be used for investment, saving, or even just sitting still. These are all financial management.

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For those who are still working, they should know what their source of income is, how much money they can keep each month, and how much fixed income they have before financing. And they are very clear about what their expenditure items are and how much fixed expenditure they have every month and year. Keep a clear bill in mind.

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If you have retired, you should also plan your income sources and expenditures as a whole, and anticipate possible future expenditures.

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At any stage, if you find that your savings are not ideal, you should start to think about how to reduce unnecessary expenditure and increase savings to cope with unexpected practices, children’s education, parents’ pension, middle-aged crisis, self pension and other problems that will occur in your life.

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After setting goals, we can use various saving and investment methods to achieve goals. As mentioned above, we should first plan our own capital growth needs, and then understand the investment varieties on the market, which meet our own investment threshold, risk tolerance and return range.

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For example, if you want to save a pension of 1 million yuan through 10 years of investment, you should first look at the amount of principal you can invest, and then calculate the annual 5% return of continuous investment for 10 years, and the amount of principal you need. If your existing capital is still 50000 yuan short of the target principal, you should find ways to save it from daily expenses. On the contrary, it is easy to achieve the goal. At the same time, you should know whether the investment with 5% return will fluctuate in real time, and try to achieve a stable yield.

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In any case, investment is a long marathon, not a sprint race. The investment market is more likely to reward those who have endurance and stable mentality. With the mutual support of correct financial management concept and good investment habits, more and more funds will be available for investment, and the income will become more and more objective. A virtuous circle will thus be formed.

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