Those of us born in the 90s, we didn’t really feel the impact of the 2008 financial crisis – after all, we were young and hadn’t yet started to focus on finance. The roaring bull market of 2015 came with a lot of fanfare, and when it ended, it made quite a stir, ultimately requiring government intervention to stabilize the markets. Simultaneously, this brought the concept of “funds” into the view of ordinary people.
Ant Financial and Alipay
As a natural traffic entry for Ant Financial, Alipay was born with the positioning of a payment tool. When purchasing funds, Alipay and WeChat both saw widespread adoption – most people chose Alipay. Alipay has successfully transformed fund sales into an ordinary shopping experience. Starting in 2019, during the small bull market, fund managers’ “warming up” recruitment, ultimately driven by the monetary easing guided by the COVID-19 pandemic. Those who entered made a profit, those who didn’t enter envied them and rushed to join. The scale of new funds broke through the hundred billion mark at an increasingly rapid pace, and with grandmothers starting to buy funds, another trillion fund is not far off.
Prior to Alipay’s explosive rise as a code-driven internet fund sales platform, ordinary people’s contact with fund sales was primarily when depositing money in banks, where the branch manager would enthusiastically introduce various investment products. The internet packaging and promotional page information guidance, the exorbitant advertising fees given by fund sales institutions, completely detached Alipay’s fund advertisements from rationality.
Normal bank fixed-term investment returns are 4%, P2P investments that played wildly in recent years were 8%, credit card repayment interest rates are 12%. Our protagonist, Alipay’s promoted funds – 150% and 250% – were popular in the market, making everyone happy, both inside and outside the market? Alipay was playing with fire. The advertised returns only showed the three-year cumulative yield chart, while traditional fund companies only presented annualized average yields. Why didn’t they dare to present the annual average yield alone? Because it wouldn’t look good, and it wouldn’t guide customers to purchase funds.
Fixed Income Investment
China hasn’t yet entered a negative interest rate era, making bank deposits and government bonds the most secure fixed-income products. Pure credit funds are also a good option. You can refer to the data published by local statistical bureaus to find China’s average wage levels. I’ll present a simple scenario: with an asset size of 2 million (CNY), an annualized yield of 4%, the annual income will exceed most cities’ average wages.
Epilogue
This is largely based on my personal experiences, and there’s much more I could write. If you want to learn more, I recommend reading a variety of economic books yourself – don’t blindly follow. For ordinary families, the core of financial planning is preservation, not chasing risky dreams of getting rich quick.
My uncle often says:
The right thing at the right time has the greatest value; study diligently when you’re studying, and getting a good degree is better than earning pocket money by distributing flyers; work seriously when you first graduate, and the growth in your salary will bring you substantial returns; and when you start a family, learn to take care of your home.
Epilogue
Those interested can take a look at this speech transcript: On Time, you need to read many books to find the answer. The text transcript is available on our site.