We can Meet the Financial Regulation Only When the Main Part of Consumer Finance is the Young People (II)

25 Dec

Let us think and learn more about financial knowledge. We will know that borrowing money is not a bad thing as long as it is not excessively in debt. In the past, China's financial market was underdeveloped. Today's young people are fortunate to have different financial products to choose from to improve their lives and invest in themselves. Therefore, we must change our mindset and optimize our consumption at different stages of our lives according to our "lifetime income", instead of arranging consumption and investment only according to current income. There are many Chinese people, especially those who are parents. They always feel that young people are not reliable in borrowing money, as if this would corrode young people. The experience of the United States proves that this concern is unnecessary. Pay attention to buy galvanized steel pipes.

Installment payment solves overcapacity in US manufacturing

Consumer finance in the United States began in the middle of the industrial revolution and was "invented" by a sewing machine company. At that time, the sewing machine became a "big piece" that American families rushed to, and every family wanted to own it, but the price was too high. How to do it? Edward Clark, marketing director of a sewing machine company called I.M. Singer, thought of a marketing idea: Why don't we let American families use the sewing machine first and then 'schedule'? As a result, the company pioneered the first single-consumption financial service in US history: providing instalments for families who could not pay for sewing machines at one time, down payment of $5, then paying $3 a month, paying for the machine and loan interest in 16 months.

This method created a business record: the sewing machine company sold more than 260,000 sewing machines in 1876, more than the sum of all other sewing machine sales. Businesses in other industries have seen the benefits of this model and have followed. The development of consumer finance has also boosted the economic growth of American society. By the beginning of the 20th century, the industrial revolution had increased the manufacturing capacity of the United States, but the people's spending power did not keep up, so there was overcapacity. Under this circumstance, in order to stimulate consumption, consumer finance has developed greatly, in order to exert the potential of consumers, and the US economy has achieved rapid development.

In fact, the Chinese economy has also benefited from consumer finance in many ways, especially in the household consumption industry. In the experience of the United States, borrowing and spending did not destroy Americans. Contrary to this, research shows that more young people and families are cultivating better and better financial discipline because of the monthly loan, and the financial culture is also formed under the pressure of monthly supply. Today's China has many similarities with the United States at that time. The economy is facing a transformation, the social growth structure needs to be adjusted, and it needs to shift to the service industry and let consumption play a more important role in the economy. Consumer finance is of course indispensable.

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