They put forward a standard of "Standard & Poor's Quadrant Chart of Family Finance", which means that after a family earns money, it should divide the money into these four quadrants:
1. Life-saving money It accounts for about 2% of family assets. Critical illness insurance must be bought. If you spend a small amount of money to prepare every year, you can have a predictable sum of money to deal with emergencies. If you have assets of 1 million, the life-saving money should be about 2 million. The longer you buy insurance, the better, and it is best to keep it for life.
2. the money to be spent. It accounts for about 1% of family assets. Food, clothing, housing and transportation, tuition, mortgage, car loan, medical expenses and so on. The characteristic of this part of the money is that it can be taken at any time, so you can choose safe and mobile jobs, such as bank deposits, short-term bank wealth management products, Yu 'ebao and so on. For people with unstable income, set aside a year's money.
3. The value-preserved money accounts for about 4% of family assets. This part of the money is aimed at fighting inflation, with a longer term, more stable income and moderate risk. Real estate, gold, and fund portfolio all belong to this category. If we persist in fund portfolio allocation or fixed investment for 15 years and realize compound interest of more than 1% annually, there is no problem in beating inflation.
4. Money that generates money accounts for about 3% of family assets. This part of the money is aimed at pursuing high returns, which fluctuates greatly and bears high risks. Although the first three items can ensure food and clothing, they cannot bring extra wealth. Therefore, venture capital is still necessary. Stocks, funds, private equity investment and futures foreign exchange can be considered without affecting daily life.
Standard & Poor's gives all families a piece of advice: If you spend as fast as you make money, no matter how much money you earn, it will only be a way for the poor, and once the risk occurs, your family will be vulnerable, let alone realize real wealth freedom.