Introduction To General Finance Rules

　 Investment expectations, wealth and risk tolerance of different investors are different. As an investment adviser, we should tailor different investment strategies to different investors as much as we can. But in some large areas, the actions of the vast majority of investors will be roughly the same. Here are 10 general rules.

1, live within your means.

This is the key to successful investment. If you have a job, you should deposit at least 10% of your pre tax income every year. Maybe your current investment returns are very good, but this can't really replace your pension plan. Only by developing a good habit of saving can we ensure that there is no worry in the rest of our lives.

If you retire at home, your additional investment should be lower than the amount of previous investment returns. In the early days of retirement, it is recommended that you reinvest your investment in reinvestment so as not to be affected by inflation. After a while, you can earn more flowers.

　 2. Pay close attention to retirement accounts.

If you are still in the workforce, there is no doubt that every year there should be sufficient funding for the 401 pension plan and your personal retirement account. For most people, the retirement account is the best savings item, because it not only enjoys preferential taxation, but also has the obligation to invest in your account.

Of course, after retirement, your pension account no longer has new capital injection. However, you can indirectly enjoy the extra income by delaying withdrawals. "After retirement, there is always such a problem. When we need to spend money, which pocket do we pay more?" Financial planner Ross Levine said.

　　 3. Diversification of portfolio

Generally speaking, young people may want to make more notes in high-tech or emerging markets, while older people tend to invest money in blue chips. But the sensible thing is to diversify your portfolio. It's a misunderstanding that "young people can put eggs in one basket". You can take an aggressive investment strategy, but it is better to have foreign stocks, large cap stocks and small cap stocks. This is the advice of financial planner, Zan San Quinn.

　 4. Stocks should account for at least half of the portfolio.

We usually encourage young people to maintain a high share in their portfolios, but now we encourage the elderly to do the same. Especially for those who have retired for more than 20 years, stock assets are indispensable. For such investors, investing in stocks is not only conducive to avoiding the decline in savings receipts caused by low inflation, but also in time to withdraw from the stock market when the market is bad.

　 5, investment should pay attention to overall income.

For any investor, what really matters is the overall post tax return of the portfolio. That is to say, the key to the investment effect depends on the sum of dividends, interest and price increase you get.

This principle is especially important for retirees. Such investors tend to focus on yield, but if a single rate of return is at the expense of the overall value of the portfolio, then it may have dangerous consequences.

　　 6. Build heavy positions in index funds.

Investment is always accompanied by risks. For example, the return on investment is not satisfactory, or because of a bad attitude and "cutting meat" when the market is at its worst. Even when the market is better, it may be because the wrong stock or fund has been chosen, so that others will make money and lose money.

For this reason, you can consider building a heavy position in the index fund, which can at least guarantee that some stocks in your portfolio can always follow the big market and make money in the big market.

　　 7, avoid high cost liabilities.

The key is to deal with credit card overdraft. We often overdraw credit cards when we are in a tight position, and often fail to pay for overdraft in time. As a result, it is the most foolish way to pay interest on a month to month basis.

　 8. Develop contingency plans.

You should deposit a sum of money in the bank, which can not only be used to pay for the small budget extra for repairing the fireplace and dishwasher, but also for the large cost such as changing roofs and seeing a doctor.

"The most important thing is not cash itself, but the need for timely cash flow, including selling stocks and other securities, lending money to 401 pension schemes, establishing margin accounts, and so on." Lewin concluded.

　　 9, take care of family members, support the old and the young.

If there are financially unsupported family members who need financial support from you, you should make a plan for them so that you will not be able to live normally when you are in an accident.

"You have to develop a disability emergency response plan. The life insurance plan should take into account the spouses, provide financial guarantee for the children to receive university education, and prepare for the unfortunate involvement in litigation." Said Quinn.

　 10, do a good job in property organization plan.

Perhaps you are clear about your property, but are your spouse and children very clear?

Besides the will and other documents relating to property, you should make your property organization plan as clear as possible. In this way, once you pass away or lose your ability, your family will know how to deal with your assets.