There is no need to talk about debt discoloration.
Wen / Ba Jiu Ling
A few days ago, the minibus saw a hot topic about the general debt of young people on Zhihu:
The data shows that only 13% of young people have no debt, and the post-90s account for half of the consumer loans, why is the debt ratio of young people so high?
At present, the question has been answered more than 700 times, and the cumulative number of views has been more than 2 million.
But when the minibus sees the four words "data show", the occupational disease is committed, why is there always someone worried about the debt ratio of young people? This article hopes to argue against the topic that only 13% of young people are not in debt.
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First, let's talk about the source of this number.
The news reported on the Internet recently is basically quoted from the "Contemporary Youth Consumption Report", which was released by the Bank of China Consumer Finance United Times Data on October 22, and the report mentioned:
A set of figures shows that there are 175 million post-90s in the country, of which only 13.4% of young people are not in debt, while 86.6% of post-90s have been exposed to credit products.
The words "a set of numbers show" indicate that the Contemporary Youth Consumption Report is also a citation, not the original source of the data.
In fact, this figure comes from the "Report on the Debt Status of China's Consumer Youth" released by market research firm Nielsen on November 13, 2019, which was obtained by Nielsen after interviewing 3,036 young Chinese consumers (18-29 year old students or incumbents, about equal to post-90s).
*The sample of 3036 users is small and may be underrepresented.
That is to say, the topic of general debt among young people is actually frying the cold rice of 2019.
Not only that, but Nielsen's original report was not simply like this, saying that 86.6% of young people use credit products. But there is a second half of the sentence: nearly half of the people have not accumulated debts.
What does the second half of the sentence mean?
For example, some leading enterprises can require the upstream to ship first, and then pay after one or two months to form accounts payable.
Although this part of the accounts payable is classified as a liability in the balance sheet, it is an interest-free liability and does not need to pay interest, so it will not affect the profit, and it can also save the operating funds of the enterprise, which is the performance of the enterprise in a strong position in the industrial chain.
Similarly, 42.1% of young people have a record of borrowing money when they swipe their credit cards and use Huabei for consumption, but they will settle their arrears during the interest-free period and also do not have to pay interest. Free money is not borrowed for nothing, which may be a more savvy financial awareness.
And there are 1351 post-90s people who really need to pay interest on loans (with interest-bearing liabilities), accounting for only 44.5% of the total sample - there are not so many young people in debt.
Nielsen has one bad news and one piece of good news about the debt of young people, and there is only one bad news left in the network spread.
"The post-90s fell into the trap of consumerism" "The post-90s generation was dragged down by debt"...
In fact, there is no need to always think about making a big news and criticizing the post-90s, most young people have the ability to control their asset status.
In addition, the liabilities themselves are different.
Liabilities are the source of money, so there must be money, which may be cash, deposits, fees or assets.
If you borrow a million to buy a luxury car, perhaps after a few years of depreciation, there is little value left and you are insolvent.
If it is real estate purchased with a million, it may appreciate in value with the development of urban construction.
In our country, some young people have a special kind of debt, called student loans, and debt has become the accumulation of human capital.
According to the "2020 China Student Aid Development Report" released by the National Student Aid Management Center, in 2020, the country issued national student loans to 5,064,300 people, with an amount of 37.812 billion yuan.
Due to the imbalance in regional economic development, there will be student loans after the 90s, and there may also be post-00s and post-10s.
This is not something that can be summed up simply by saying "only 13% of young people are not in debt".
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There is also a life-cycle perspective on the issue of young people's indebtedness.
The life of ordinary people can be divided into three stages: education, struggle and pension.
Going to school and studying when you are young is the education period; when you start a family in middle age, marry a wife and have children, it is a period of struggle; retirement after old age is a pension period.
From birth to death, there is not a single day without money, but the time to earn money is very short.
The expenditure of the education period is the responsibility of the parents; the 22-year-old university graduates into the society, begins to struggle, until the age of 65 retirement, the 43 years in between to earn their daily expenses, pension expenses after old age, and the education expenditure of the next generation.
This is similar to the operation of a business.
Changes in an enterprise's cash flow come from three activities: cash flow from operating activities, cash flow from investment activities, and cash flow from financing activities.
When the enterprise is in the initial stage, the hematopoietic capacity of its own operation is insufficient, and the cash flow generated by operating activities is negative, and it is very dependent on external funds.
From seed investment to series A, series B to listing, this is equity financing, which is equivalent to parents raising us year after year.
As businesses grew, banks began to be willing to borrow money, and that's when there was debt financing.
The enterprise continues to grow and develop, and its daily operations can generate sufficient cash flow, at which time it can not only return bank debts (repay debts), pay dividends to investors (pension parents), and cash outflows from financing activities; but also invest abroad (nurture the next generation) and generate cash outflows from investment activities.
When a person has just entered the society, in the initial stage of struggle, it is often more difficult to make ends meet, and it is actually normal to have some debts at this time. As you age and your income rises, your liabilities naturally decrease.
In 2019, the Survey and Statistics Department of the Chinese Minmin Bank conducted a survey in which among more than 30,000 urban households (a total of about 100,000 people), the head of the household was 26-35 years old (corresponding to the birth year 1984-1993) due to the pressure of housing purchases, family start-ups, children's education and other aspects, the debt participation rate was the highest, at 73.1%.
With the increase of age, the household debt participation rate gradually declined, and the household debt participation rate with the age of head of household 65 years and above was the lowest, at 25.1%.
It is foreseeable that after 10 or 20 years, today's post-90s generation will gradually decline with age and income growth.
At that time, I hope that the post-90s who have already landed will be more tolerant of the debt problems of young people such as post-00s and post-10s.
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At the end of the article, let's talk about the backside of debt - savings.
In a 2019 report, Nielsen found:
Sixty percent of students and nearly 80 percent of office workers save more than 10 percent of their income each month.
On October 27, the 2021 "China Pension Prospect Survey Report" jointly released by Fidelity International and Ant Wealth Platform showed that in 2021, half of young people (18-34 years old) began to save, and the average monthly saving amount reached 1624 yuan.
*Sample total 23,472 people.
Although the two reports count different levels of savings, they both show that the younger generation does not only buy and buy, but also saves for the future.
Regarding savings management, there is a 3-card management method, that is, according to the purpose, the money is placed in three cards, namely "change card", "short-term savings card" and "long-term savings card".
Starting from your own needs, it will be easier for you to find the right management method.
Debt and savings are two of the biggest problems for young people to sort out their finances. The sooner you know where your money came from and where it's spent, the sooner you'll be able to control your wealth.
Author | Pick up the moon | When the value is edited | Wu Crescent Moon
Responsible Editor | He Mengfei | Editor-in-Chief | Zheng Yuanmei | Image source | Visual China