What is best to do with your money ?
For one thing, with the appreciation of the RMB, the rising cost of living (inflation), the money we own are devaluating, so more and more people search for the ways of inflation-proof financial management.
For another, Wealth falls in love with those involved, in order to make more money, we have to learn how to manage money. There are lots of things that you can do with money, here I will list several ways about money management.
To start with thinking about investments, Investments make your money grow and which also help you secure your future. You can invest your money in a number of things like property, bonds, stocks, etc.
In recent years, the price of gold keeps going up and breaks the record over and over again, so a lot of rich people have a taste for gold investment. Investing in gold is still a good way against inflation even though its price is very high now, and a few financial experts think Investing in silver is also a good choice.
The housing price have kept soaring since 2005 (except in 2008) in China, but this year the government introduced a host of policies and measures to suppress the housing price, so investing in real estate is not recommended.
You can invest in the stock market, gaining the equity from “buy low, sell high”, but we should be aware of stock market risks, trade wisely. And they charge commissions on buys and sells normally. The stock prices plummeted recently, maybe it is a good chance for bottom fishing.
Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced stocks. There is a tremendous amount of stock investing books and websites that teach stock investing strategies that don’t work. Particularly, people that teach “technical analysis” systems that sound impressive, but don’t work. So you need learn a lot by yourself before doing that.
It is good to buy mutual funds that will diversify for you. Buy no-load, low cost funds. It is a safe way of managing your money. You are less likely to have a dramatic drop in value. They also have the lowest management fees. It pays much better than banks, I started doing that over a year ago and have been very happy with them.
You can also fix deposit your money with the bank for a certain fixed amount of interest rate which you will get eventually when the fixed deposit due. Investment in general is a term associated money management, and often linked with saving or deferring consumption.
It is the safest money management way, and now the RMB interest is very high relative to the last two years. You don’t need to learn the complex financial knowledge, just open an account in the bank that you want.
Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. Invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. But make sure know how to do “Asset Allocation” determining how much to put in each type of investment.
Also just keep a bit on hand just in case for a rainy day. You had better set yourself up for the near and long-term. The first thing I would do is make sure that I have enough cash on hand or in a savings account for an emergency. Maybe donate some of it to poor people or maybe get something you have been wanting or buy an iPod touch or iPad , If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have three or four months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.
There are many different opinions out there on what the best ways are. so read more websites for further information. If you find it too confusing, contact a professional financial advisor. Gather the information as accurate as possible and form your own opinion.
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