ThinkerQAQ

NOTE

Personal Finance

English translation of the original VNote “Personal Finance”, preserving its structure with only necessary small corrections.

InvestingUpdated 3 min readhistorical

This is a historical learning note and may contain outdated or incomplete understanding.

Note: The original VNote structure and historical views are preserved. Product rules, returns, policies, and specific assets are time-sensitive; only clear errors or changed institutional rules are corrected minimally. This is not investment advice.

1. Asset Allocation

1.1. Standard & Poor’s Household Asset Quadrant

1.1.1. “Life Money”

For short-term consumption

10% (an example ratio from the original model, not a universally applicable standard).

1.1.2. “Protection Money”

For insurance protection

20% (an example ratio from the original model, not a universally applicable standard).

1.1.3. “Money-Making Money”

Focused on seeking higher returns

30% (an example ratio from the original model, not a universally applicable standard).

1.1.4. “Capital-Preservation Money”

Focused on safety, stability, and the long term

40% (an example ratio from the original model, not a universally applicable standard).

1.2. Qieman Advisory

Divide funds into four buckets by investment horizon and match them to advisory strategies.

1.2.1. Liquid Money

Available at any time

Mainly money-market funds.

1.2.2. Stable Money

Half a year

Mainly bond funds.

1.2.3. Long-Term Money

3 years

Mainly equity funds.

1.2.4. Insurance

1 year / lifetime

Mainly health and accident insurance.

2. How to Analyze Wealth-Management Products

Choose among financial products by combining liquidity, risk, and return. In a product prospectus this is reflected in:

  1. Investment scope
  2. Risk: risk rating + maximum drawdown
  3. Return: performance benchmark + fees + historical returns
  4. Liquidity: subscription + redemption

Main comparisons:

  1. Market interest rates
  2. Risk-free rate (short-term, e.g. one-year government-bond yields are commonly used as a proxy)

3. My Asset Allocation

3.1. Cash

  • For daily expenses and money needed at any time, such as rent, food, and transportation.
  • Ratio: 10% of annual income.
  • Liquidity: available at any time.
  • Return: 2-3% (historical note).

3.1.1. Money-Market Funds

Examples: Yu’e Bao in Alipay or Lingqiantong in WeChat.

3.1.2. Bank Cash-Management Wealth Products

  • An open-ended cash-management product issued by a bank.
  • The original note recorded particular cut-off, minimum-purchase, redemption, risk-grade, and return rules. These vary by product and regulation and must be checked against current product documents.
  • The original note described T+0 products and used SHIBOR as one reference for short-term funding conditions.

3.2. Short Term

  • Prepare for expenditures within a defined period; safety first, liquidity second, with a desired return somewhat above liquid cash management.
  • Ratio: 50% of annual income.
  • Liquidity: 3 months to 3 years.
    • Within 3 months: brokerage wealth management.
    • 3 months to half a year: money-market funds.
  • The original note recorded an expected return of 5-10%; this is not a guaranteed range and depends on the product and market.

3.2.1. Brokerage Wealth Management

  • A service in which a brokerage accepts an investor’s mandate and invests funds in stocks, bonds, or other products.
  • Risk: principal and interest are not guaranteed.
  • The original note recorded a 3-6% expected-return range and terms from one week to one year; these are historical examples.

3.2.2. Bank Wealth Management

Bank wealth-management products are not bank deposits and are not covered by deposit insurance simply because they are sold by a bank.

Their permitted investment scope depends on product type and regulation.

Bank Wealth Management vs Bond Funds

The original note compares purchase thresholds, liquidity, investment scope, fees, and disclosure. These details can change and should be checked product by product.

  • Bond funds generally invest at least 80% in bonds under the relevant fund classification rules.
  • Bank wealth-management products are not all 100% fixed-income; actual asset allocation depends on the product contract.
  • Funds have periodic reports; bank wealth-management products also have information-disclosure requirements, with frequency and content depending on current rules.

3.2.3. Large-Denomination Bank Certificates of Deposit

Historical note.

3.2.4. Bonds

3.2.5. Bond Funds

3.3. Long Term

  • Money reserved for the future; the original note viewed a horizon above three years as helpful for absorbing short-term volatility.
  • Ratio: 30% of annual income.
  • Liquidity: 3+ years.
  • The original note recorded a return target above 10%; long-term equity returns are not guaranteed to reach a fixed level.

3.3.1. Stocks

3.3.2. Equity Funds

3.3.3. Commodities

3.4. Insurance

  • Insurance can provide protection against uncertain future losses.
  • Ratio: 10% of annual income in the historical note.
  • The note lists critical-illness, medical, accident, and term-life protection.

3.4.1. Social Security

Original VNote internal link; not migrated yet.

3.4.2. Commercial Insurance

Original VNote internal link; not migrated yet.

4. Investment Strategy

5. References

The original note contains historical product links and discussions about household allocation, bank wealth management, and bond funds.