Is it feasible to live on interest on millions of deposits without working? Revealing the life of a pension
Nowadays, saving has become the most common way of financial management for people at the bottom, and the interest income brought by savings has become a part of people's income.
If you had a million, how would you spend it? Has anyone ever wondered if they would be able to support themselves if they put the million in the bank and instead rely on the interest income from the bank deposits?
Before discussing the interest earned on 1 million, it is necessary to explain what is the deposit activity of banks and what is the interest rate currently charged by most banks.
At present, it is generally accepted in the business community that deposit activities have become the main activity of commercial banks and are called"The foundation of the bank"。
Deposit activity refers to a business behavior in which people deposit their fixed assets into commercial banks based on the basic trust of commercial banks in the public and withdraw them on an agreed date to make a profit.
It is not meaningless for commercial banks to collect this huge amount of money, but to convert it into their own lending behavior, so that the funds can be used through the loan business.
Therefore, commercial banks should also compensate depositors with certain interest, which has become the main source of depositors' income.
Depending on the storage period, deposits can be divided into fixed deposits and fixed deposits. Fixed term is because the deposit term and interest rate have been agreed in advance before the deposit, giving the bank more room to operate, so the interest income will be higher than that of the fixed term.
Next, a question that worries many people is in front of us: how much interest can I get on a fixed deposit every year? This brings us to the question of the annual interest rate.
I can tell you that the annual interest rate in our country is generally on a downward trend. In 1995, the annual interest rate could reach around 11%. Since the beginning of the 21st century, the annual interest rate has been fluctuating, and it has only begun to decline gradually in recent years.
Taking the RMB deposit interest rate table released by the Bank of China as an example, the annual interest rate of spot deposits is only 0.20%, 3-month fixed deposit annual interest rate is only 115% with a 6-month fixed deposit interest rate of 135%。
The annual interest rate for a one-year fixed deposit is 145% with an annual interest rate of 1 for two-year deposits65% with a three-year deposit with an annual interest rate of 195% with a five-year deposit interest rate of 200%。
To help you calculate, if you put 1 million in the bank and put it in a one-year fixed deposit, after one year, after deducting the principal amount of 1 million, you will receive 14 500.
If we look at this money as income, the monthly income is 1 208 . And if you make a three-year fixed deposit deposit. After three years, the interest earned is 58,500, which translates into an adult income of about 20,000 and a monthly income of 1,625.
Finally, if we choose a 5-year fixed deposit with the highest annual interest rate to hold the principal of 1 million, we will receive 100,000 yuan of interest after 5 years, which is equivalent to 20,000 per year.
However, it should be noted that since the interest rate on demand deposits is too low to meet the needs of ordinary people, the above figures are calculated on the basis of fixed deposits.
It is worth mentioning that commercial banks need to protect the trust of their customers, so this annual interest rate does not change often. However, if affected by inflation, insufficient funds, or too low a deposit, the deposit rate will change to a greater or lesser extent.
Therefore, the above figures do not represent the whole picture, but only scientific calculations based on idealism.
Supporting yourself is, of course, the first priority, so what does the cost of supporting yourself belong to? Let's calculate it according to idealism.
First of all, food certainly comes first, and food spending is also one of the components that usually account for the largest proportion of household expenditures in terms of the relevant aspects of the household.
Housing also includes expenses such as rent, mortgage, etc. We also need transportation to get around, and depending on the mode of transportation that families choose, the means of transportation** used to get around will be different.
People are not always healthy, and when they are sick, we also have to take into account the necessary medical expenses.
The disparity between the rich and the poor in our society is still quite obvious, and there will be a big difference between high-income people and a small number of low-income families. Therefore, in the calculation, we can only use the published averages, and only the expenses related to the necessities of personal life are calculated below.
According to 2023 data released by the National Bureau of Statistics. In terms of food, the annual per capita consumption expenditure of residents is about 8,000 yuan, an increase of 67%。
In terms of household goods and services, the per capita annual consumption of Chinese residents is 1,500, an increase of 6 over 20226%。
We spend about 3 600 per capita on transport and communications, 14 more than in 20223 per cent and 2,400 spent on health care.
However, this number can only represent an average if taken to the most"Simple"To compress a person's life to a minimum, then it will cost at least more than 15 000 a year.
Looking at the numbers above, we have calculated by the one-year interest rate, if you choose a one-year fixed deposit, the annual return is about 14,500, and if you choose a five-year fixed deposit, the annual return is about 20,000, which is undoubtedly enough when life is compressed to the point of extreme frugality.
But frankly, this conclusion is not very relevant.
People are changeable, and trying to calculate everyone's life with a cold formula will certainly not work.
Roughly calculate the annual living expenses of a family, and simply superimpose some of the above-mentioned per capita data with the number of family members and total expenditures, and the annual living expenses of a family reach at least 70,000 yuan.
This number is far beyond the range of interest that can be earned with 1 million.
In other words, the annual interest rate of just 1 million deposits, even at the highest annual interest rate for a five-year fixed deposit, is a huge amount of money that cannot cover household expenses.
Therefore, based on the above data series, we conclude that if the purpose of these rates is to provide a simple life for a person who does not have any burdens. In the author's opinion, this is still possible in some cases.
But"All for one, one for all"How many of them are there? So the final conclusion is still negative.
The most fundamental reason is the low interest rate on deposits.
Economic development has led to the development of society, and the development of society has given each of us a wider and more diverse choice to take care of the wealth in our hands.
Today, most of our citizens at the grassroots level, and I believe most of you around you, readers, have chosen"Save"way.
Many readers will also ask, the above number is based on 1 million, what if I turn that 1 million into 10 million, into 100 million? Isn't there always a number that allows me to meet my expenses without having to work?
Open the door to answers, indeed.
But frankly, this answer is of no real value to all of us here. After all, the hundreds of millions of people in the bank are certainly not the majority, are they?
In addition, all financial instruments are more or less risky, and savings are no exception, just more stable compared to other financial instruments such as ** and bonds.
There is also a famous saying in the financial world:"The greater the risk, the greater the reward"。
Since the risk of saving is relatively small, the interest rate is naturally the lowest, which directly determines the level of expected return on your capital.
This interest rate varies from bank to bank, and the reason why Bank of China is used is because it is currently the most representative bank in China.
However, most banks have similar annual interest rates, which means that the above conclusion is valid.
But most importantly, we need to know that people's yearning for a better life is endless. Most people are not satisfied with the current way of life and want a better life, and of course there is nothing wrong with that!
Your expectations of life can also affect your spending. If you want to live in a big city, your expenses will definitely be different than living in a small rural area.
So, with that $1 million in savings, it doesn't mean you can sit back and relax and stay home every day doing nothing. These 1 million are still a long way from giving you a long-term foothold in this society and will not allow you to live a comfortable life.
We also need to increase our income through other means, such as investment, entrepreneurship, etc.
As the saying goes, if there is a good side, there must be a bad side. When managing funds, we recommend preparing a lump sum"Reserves"so that in the event of the unexpected, you will not be left in a completely passive situation.
Savings deposit income is one of the most common ways of financial management in China. However, savings income is relatively low and not completely stable. When choosing a financial management method, we should conduct a comprehensive and scientific assessment according to our own current situation and the trend of social development.
If you have a million in the bank, it means you have good"Reserves"。But it is impossible to live on this money for the rest of your life. Unless you're planning to spend the rest of your life on a regular basis.
This is a very simple truth, instead of passively accepting the income brought by 1 million, why not take the initiative and broaden your own path to increase income?