As China's economy continues to grow, the number of middle-class families is increasing. When family wealth reaches a certain stage, investment and financial management become an inescapable topic. However, data shows that 70% of families in China may be engaging in "suicidal" asset allocation. The data reveals that in the average Chinese resident's household assets, nearly 60% are locked up in real estate, and about 20% are stored in banks.

Storing all your money in a bank may seem like a safe approach, but it's not actually the best choice, because currency devalues over time, and money will become less valuable. This type of financial management will only lead to a gradual shrinkage of wealth.

If all your eggs are in one basket, when the basket breaks, the eggs will also shatter. The aforementioned methods of asset allocation have very obvious drawbacks.

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So, what kind of asset allocation method is the most scientific and stable?

Today, I would like to recommend a more universal "4, 3, 2, 1" family asset allocation plan, which is recognized worldwide as the most scientific and stable way to distribute assets!

1

Money for spending (10%)

The "1" represents money for daily expenses, mainly for emergencies and fixed household expenditures. It is advisable for this to account for about 10% of the family's assets, which can be adjusted according to actual circumstances. This money should be kept in demand deposits at banks or in the balances of various software applications, to be used for our clothing, food, housing, transportation, beauty, shopping, and repayment of mortgages and car loans.

It is important to ensure that the "1" portion does not account for a high proportion and to allocate the other parts of asset allocation appropriately.Life-Saving Money (20%)

The "2" primarily refers to life-saving money, which typically accounts for 20% of a family's assets. It is intended to cover unexpected large expenses and emergencies. This fund ensures that there is sufficient cash on hand to deal with unforeseen circumstances and significant illnesses, providing a safety net for the family.

While the "2" may not seem to have an immediate impact, it is crucial during critical moments. It guarantees that one does not have to resort to selling vehicles, real estate, or selling stocks at a low price, or borrowing money from all directions in a rush. Early risk management is essential to prevent sudden financial collapses in family finances, such as "one illness taking you back to the pre-liberation era." Being prepared in advance prevents being caught off guard.

Money for Earning More Money (30%)

The "3" represents the pursuit of investment returns, using money to generate more money, and it generally constitutes 30% of a family's assets to create income for the household. Although there are limited investment channels in the country, for first-tier cities, it might simply involve buying real estate.

In addition to purchasing property, we can also engage in various investment and financial management methods. Since the "3" is aimed at pursuing investment returns, it may also face high risks. This requires us to reasonably control the proportion of "3," which can be adjusted between 20% and 40% depending on the situation.

It is important to make reasonable allocations, being able to withstand both gains and losses. Regardless of the returns, the financial health of the family should not be critically impacted, allowing for a composed response.Value-Preserving Money (40%)

The "4" refers to a greater emphasis on long-term returns, which is the money for preserving and appreciating the principal. This typically accounts for 40% of a family's assets and is intended to secure the retirement funds for family members, children's education funds, and money left for the next generation. It is money that must be used and needs to be prepared in advance.

The characteristic of the "4" is that it must ensure that the principal is not subject to any loss. The returns may not be high, but they are long-term and stable.

By allocating funds to secure financial products, one can achieve a continuous accumulation of capital over the long term, ensuring a sense of security and peace of mind.