Personal Finance

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					Personal Finance
Personal Finance
Definition: Personal Finance, yes in personal income, assets, liabilities, analysis of
data such as Jin Xing finishing based on the Geren on risk preference and
affordability combined with scheduled Mubiaoyunyong such as savings, insurance,
securities, Wai Hui, collection, Zhu Fang investment and other means to manage
assets and liabilities, reasonable arrangement of funds, resulting in the individual risk
is acceptable within the scope of the process to maximize capital appreciation.
Content: Most people talk about financial management, investment is not expected to
make money. Indeed a wide range of financial management, financial management is
life management money, that is, personal life, cash flow and risk management.
Contains the following implications:
1, financial management is the management's financial life, not just a
matter of relieving the immediate need of money.
2, cash flow management and financial management, each person born on the need to
spend money (cash outflow), also need money to generate cash flow. So regardless of
whether the money now, everyone needs financial management.
3, financial risk management are also covered. More traffic because the future is
uncertain, including personal risk, property risk and market risk, will affect the cash
flow (income interruption risk) or a cash outflow (costs increasing risk).
Therefore, personal finance include:
(A) of the money - revenue
Life, including the use of personal resources of income generated by the work of the
income, and financial resources generated by the use of fiscal revenue; work income
are people making money, financial income is the money to make money, can be seen
the scope of financial management and investment than even money wide. Include:
①      Working Income: includes salary, commissions, awards and other
self-employment income.
② Financial income: including interest income, rental income, dividends, capital
gains, etc..
(B) money - spending
Life, including personal and family expenses to the remaining years of life from birth
expenses, and investment and credit due to the use of financial expenditure arising.
Some people have expenses, home had the burden of making money mainly to the
cost of individuals and families cope. Include:
Living expenses: basic necessities, including medical and other family recreation
Financial expenses: including loan interest, protection-type insurance premium
expenses, investment expenses and other procedures.
(C) save money - assets
Current income over expenditures will generate savings, but each is the assets
accumulated savings, that is, can help you money to make money, generate
investment income of the principal. Old age when the human resources can not
generate income to continue working on the money depend on the resources generated
financial income or cash assets to cope autumn of their lives. Include:
① emergency reserve fund: keep some cash in case of unemployment or rainy day.
② investment: can be used to breed financial management tool for portfolio
investment income.
③ home production: purchase their own housing, the truth value of the assets of such
(D) to borrow money - debt
When the cash income can not cope cash expenditures necessary to borrow money.
Borrow money may be due to temporary make ends meet, the procurement of
long-term use of real estate or car appliances, and bring investment to expand credit.
Did not immediately pay to borrow money will accumulate debt to the balance of the
liability to pay interest, and therefore pay off the loan before, each living expenses in
addition, there are financial interest on the principal amortization expenses.
(E) save money - Tax
In modern society, not all income can be used to spending by that get their income
from the sale of the property to get their property tax, property transfer to get their gift
tax or inheritance tax, so the cash flow planning how to make the income tax savings,
in the transfer of property, planning how to make the gift tax or estate tax savings, has
become an important part of financial management for high net worth individuals
have become the primary financial consideration.
(F) protection money - insurance and trust
Protection money focused on risk management, in that insurance or trust
arrangements in advance to do so have human resources or the protection of property,
or when there is loss of access to finance to make up for lost time. Function of
insurance when an accident of family cash income can not cope when the expenditure
on or after that time, still have the money or income can make up the gap, reducing
the journey of life when the unexpected The impact of imbalances. To make up for
lost persons or things to protect life and property insurance, to pay a certain
percentage of the premium, if the insurance when the accident occurred in claims
arising from the disruption of financial income to replace income from work to meet
family living expenses or survivor , or to claim repayment of debt payments to reduce
the financial interest. In addition, the trust arrangement is independent of the trust
property other than private property, without recourse of creditors, the protection of
existing property from the loss of function. Include:
① life insurance: life insurance, medical insurance, accident insurance, disability
② product of insurance: fire insurance, liability insurance.
③ Trust.