In this day and age, not being able to manage finances is simply not characteristic of a modern individual, as we have bid farewell to the era where hard work alone could lead to financial freedom, and the agrarian lifestyle of working from sunrise to sunset. This is an era that changes every day, and we need to manage our finances to keep our wealth in line with the speed of currency issuance.

However, in reality, while many people want to manage their finances, few actually master the correct methods. Improper investments, believing in erroneous online opinions, and not finding suitable financial management methods... Many misguided and even harmful financial concepts can lead to a situation where "wealth" becomes poorer the more it is managed. Let me share a few words based on examples from friends around me.

Myth: Being frugal with reasonable large expenditures while neglecting appropriate savings in daily life!

Recently, a term has become very popular, "invisible impoverished population," referring to those who seem to have food and drink every day but are actually very poor. Why is this the case? In fact, there are many small expenditures in life that can put significant pressure on personal financial management, and these trivial costs can even account for one-third of one's income.

For example: A cup of coffee from a chain coffee shop costs 35 yuan / 20 times per month = 8400 RMB per year.

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You don't realize it, but just spending on coffee alone can add up to nearly ten thousand yuan a year. This is why many people live a very comfortable life on social media, but are actually "invisible impoverished population." By cutting back on one less pack of cigarettes, one less cup of coffee, not shopping on Taobao out of boredom, and remembering that the effect of sending 100 yuan or 20 yuan in red packets in groups is similar, you can save a considerable amount of money each month. These savings are the foundation of your financial management.

Myth: Believing that starting to trade stocks, buy funds, or purchase insurance equates to financial management is incorrect.

Economic influencers and financial management accounts are constantly urging that if you don't manage your finances, you'll be left behind. So, you manage to set aside some capital and invest it in the stock market or funds, which may result in gains or losses. Then, you might blame yourself for listening to their nonsense and decide never to touch financial products again. Is this approach correct?

Firstly, it is essential to prioritize your life needs before discussing financial management.

For instance, if you are married and need to ensure the future education of your children, that is a necessary requirement. It won't disappear whether your income increases later or you go bankrupt. In such cases, buying insurance is not strictly considered financial management; it is merely purchasing a necessary service.After you have properly allocated your assets, investing in stocks or purchasing funds with your spare capital is a financial strategy that can help increase the value of your assets. However, on the contrary, choosing to invest in stocks or funds, which carry investment risks, before properly arranging for financial needs such as housing, cars, marriage, and parents' retirement, I believe this is a gamble with funds and definitely not a suitable financial management approach.

Myth: In middle age, one still believes that work is more important than financial management.

Contrary to the above view, some people think that life does not need to be involved with financial management at all. Without mentioning other things, let's look at a set of data:

The above chart is a wage income growth cycle chart. From the chart, we can see that a person's main income in the first half of their life comes from wages. There are two leap stages where our wage income can increase significantly: one is the leap from the grassroots to the middle level, and the other is the leap from the middle level to the high level. However, as people age, wage income will gradually decrease, and in old age, they can only receive a small retirement salary.

If you still think that wages can cover the cost of living for the rest of your life, you may just be enjoying the dividend of your age.

Myth: Financial novices are most easily attracted by these "financial gimmicks."

The "hot" financial products recommended by various financial websites and platforms - "the only choice for millions of users," "the market champion for several years in a row," and so on.

Of course, the products recommended by each website have their advantages, but we say that financial management requires judgment ability. It is not advisable to measure the excellence of the product solely based on the historical returns of a certain period. If you happen to invest in a hot field, the returns within a certain period will naturally be higher than other products, such as the funds that invested in Maotai liquor at the end of last year, which basically all rose sharply. But when the hot spot fades, who can guarantee that the return rate will still be as high as before?Investment reference news recommended by stock market influencers — "xx stock rises against the trend," "institutions increase holdings in xx stock, reaching a new high within the year," "recent market dark horse stocks," "potential stocks for the future," "stocks with potential for bottom-fishing," and so on.

These types of investment news simply state the recent trends of various stocks, but be cautious not to be lured into the market by such news, becoming a valiant "plate catcher," and turning into a victim of speculation and traffic.

Irregular promotions in the P2P market — "the best returns across the network," "certified by third-party industry assessment organizations for fund safety," and so on.

Extraordinarily high returns are always the favored trick of scammers. Under the new policies of 2018, all P2P platforms must complete rectification and filing, and extremely high annualized returns should essentially not exist. Annualized returns exceeding 14%, or even reaching 20% per year, should be approached with caution.

In fact, P2P platforms with annual returns between 8% and 13% are considered a reasonable range, and it is not necessarily the case that platforms that spend a lot on advertising and love to do good deeds are particularly reliable. Remember, even third-party assessments and certifications are not 100% safe. Consumers should keep in mind not to be greedy for cheap gains and not to seek returns beyond a reasonable range; this is the first step in ensuring the safety of funds.

Of course, if you can obtain some fixed assets as collateral from the borrower during investment, that would be a 100% worry-free and secure investment.

I suggest that everyone should try to save money before they have spare cash and invest in financial management. What kind of financial investment is suitable for oneself must balance one's "essential needs" and "other needs" in order to make a reasonable financial plan for oneself.

Friends, for the sake of a happy future life, you must learn about investment and financial management. Reasonable return rates, secure asset collateral protection, and suitable for those who are just starting on the investment journey. Of course, one must also continue to learn, and as financial knowledge and experience accumulate, you can gradually try riskier financial plans. Taking one step at a time is always the right approach!