It's a substitute for banks. Review loans and investments
Second, what kind of institutions are financial institutions and how do they make money?
Financial institutions refer to institutions engaged in business, and their profit model is to collect services and corresponding fees by providing financial services to customers;
Financial institutions refer to intermediary organizations specializing in monetary and credit activities. Financial institutions in China can be classified according to their status and functions.
The monetary authority, also known as the central bank, is the People's Bank of China.
Banks include policy banks, which are divided into state-owned cooperative banks and housing savings banks.
Non-bank financial institutions mainly include state-owned and joint-stock insurance village credit cooperatives, trust and investment companies, securities companies, securities trading centers, investment fund departments and other non-bank financial institutions.
Foreign capital established in China includes foreign capital, overseas Chinese capital, Sino-foreign joint ventures and other business branches and representative offices established in China.
3. What is "compound interest" and which wealth management products will have compound interest?
Compound interest is a technical term in financial investment, which literally means to benefit from Galilee. The interest from our annual or quarterly monthly investment is added to the principal of the investment, so that we can get more interest in the next cycle, which is compound interest.
The meaning of compound interest is extraordinary. As we all know, Buffett, the god of investment, is not particularly prominent in his annual return on investment, but because he 10 has maintained a relatively stable level of return on investment, his investment has achieved amazing results under the effect of compound interest.
Compound interest is like acceleration, which is not obvious at first, but with the accumulation of time, your investment curve can be steeper and steeper. Therefore, we all hope that our investment is an investment with compound interest effect.
Bank deposits usually have no compound interest effect. For example, if you deposit a three-year deposit, the principal used to calculate interest will not change for three years. The interest it generates every year is only recorded in the account and will not generate income as the principal. If you want to achieve the compound interest effect through bank deposit, you have to manually take it out and deposit it after each maturity.
Bond products are often designed to pay interest every year, and then pay the interest before buying bonds. In this case, he has some compound interest attribute.
The simplest way to realize compound interest operation is to invest in stocks. After each stage, you can reinvest your investment profits. Here is a 72 rule. Just divide 72 by your rate of return every time, and you get the time needed to double it.
For example, your account has a daily limit today, and the yield is 10%. If the principal is 654.38 million yuan, it becomes 1 10000 yuan. The next day, you will invest this 1 10000 yuan. If the daily limit can go up again, it will become 12 10000 yuan. By analogy, if the yield of 10% is divided by 72, it will take 7.2 days, which means it can be doubled on the eighth day.
Fourth, how do financial institutions make money?
I. Banks
Mainly provide deposit services, with poor profits. According to the legal system, banks are not allowed to directly invest in savings users' money. Banks are like a bridge, connecting depositors and lenders at both ends of the bridge, and only charging for crossing the bridge. The depositor's deposit guarantees the principal, but the low income can hardly resist inflation. Banks only pay attention to the profit gap, and lenders don't care how much money they earn by taking money to invest. Their only concern is to ensure that borrowers can get the interest of money anytime and anywhere, meet this condition, and the longer they borrow it, the greater it will be.
Two. securities
I don't talk about investment business here, but mainly introduce the business of securities companies that provide securities trading. Their profit mainly depends on earning transaction fees, or just like discount brokerage companies only charge each transaction fee, or securities companies that provide full services make suggestions through portfolios and earn transaction fees and performance fees at the same time. In other words, for brokers, customers only have transactions. Brokers can make money. The more you trade, the more you earn. Unless there is a performance fee mechanism, generally speaking, the investment profit of customers and the profit model of brokers are not exactly the same!
Third, insurance companies.
Insurance companies provide all kinds of guaranteed and investment insurance products. Among financial institutions, the only one allows customers to invest their own money directly, but does not rely on collecting management fees. Let's take the dividend insurance policy as an example. Insurance companies manage separate accounts for insurance premiums paid by customers to invest in securities, such as bonds, real estate stocks and private placements. The distribution of investment income is similar to the priorities of the investment community. Stable income ensures that customers have it first, and the remaining risks and benefits are borne and owned by insurance companies. Investors may question how insurance companies can guarantee to make money. The capital preservation safety is written in the contract, so don't worry at all! At the same time, insurance companies have a very long-term privileged option portfolio, and insurance companies often retain excess profits and leave the years with unsatisfactory subsidy returns to themselves for good years.