How Family Farmers Can Manage Family Finances Well to Achieve Prosperity

With the development of family farms, many farm owners can earn a net income of tens of thousands of yuan a year, or even hundreds of thousands, which is the envy of others. But many people hold spare cash without knowing how to manage it, and saving in the bank is their only investment option. So how should they manage their money? Let's look at the advice given by experts.

[Case Study]

Uncle Liu, 55, is a farmer in the Chongming area of Shanghai. He has contracted several vegetable greenhouses and also raises Chinese mitten crabs. Last year, Uncle Liu's net income reached 250,000 yuan, which is enough to make many city dwellers envious. At present, Uncle Liu's family has been running the contract operation for more than 5 years, and through this has accumulated savings of over a million yuan. Uncle Liu has one child who is currently attending university. How can Uncle Liu help his family increase its income through investment and financial management?

[Advice]

Based on Uncle Liu's family situation, the experts provided the following advice, as detailed below:

1. Set aside enough funds for production and daily life

First, Uncle Liu should reasonably arrange funds for the family's current daily life, as well as reserve funds and funds for production operations, and so on. This portion needs to be set aside. The rest can be used for investment. Investment terms can be divided into three types: short-term, medium-term and long-term. Short- and medium-term investments can provide better liquidity, while long-term investments can better grow wealth.

2. Diversify asset allocation

It is suggested that Uncle Liu's family investments should preferably be diversified, spread across 3~4 projects for asset allocation, and it is recommended to do so through indirect investment. It is not advisable to directly intervene too much in unfamiliar fields.

3. Allocate short-term and medium-term investments

For short-term investment, it is suggested to consider some bank wealth management products, such as money-market-oriented products, whose returns are relatively stable, averaging around 4.5%~5.5%. The investment threshold is only 50,000, and the investment terms range from 1 month to 12 months. In addition, some securities investment plans can also be allocated. These two short-term and medium-term investments are both quite suitable for Uncle Liu's family, and the investment share can be kept at around 20%~40% of investable funds.

4. Buy suitable commercial insurance

Uncle Liu has only one child, so elderly care will become a heavy issue in the future. In order to reduce the family burden, in addition to basic protections such as the New Rural Pension Scheme and the New Rural Cooperative Medical Scheme, within an affordable range, Uncle Liu can appropriately purchase commercial insurance such as critical illness medical insurance for his family, strengthening elderly care protection and also reducing family financial risk. Xu Pei