The 4321 law refers to the ideal distribution method of family income: divide the total income into 4 parts, 40% for housing and other investment projects, 30% for family living expenses, and 20% for deposits as basic security and emergency

10% of the deposit is used for insurance.

Methods/Steps 40% Mortgage and Investment 31 Law: The monthly mortgage repayment should not exceed 1/3 of the total income. For example, if the family’s monthly income is 10,000 yuan, the upper limit of the monthly payment amount is best 3,333 yuan. Once this standard is exceeded, the family’s

When the asset proportion structure changes, the ability to respond to unexpected situations (illness, unemployment, having children, etc.) will decrease, and the quality of life will also be seriously affected.

If the mortgage price is set within the affordable range according to the Law of 31, it will help small families maintain a stable financial situation.

Rule of 80: The proportion of investment in stocks and stock funds = 80 - your age. For example, if you are 30 years old this year, then according to this rule, the proportion of your investment in stocks and stock funds cannot exceed 50%. Assume that your personal assets are 1 million.

Yuan, then you can only invest up to 500,000 Yuan in stocks or stock funds. Exceeding this ratio is equivalent to exceeding your own risk tolerance, which is not conducive to financial health.

30% of household living expenses. Before paying your salary, make a budget for next month. In other words, deduct the savings first, and the rest is what you can spend. While making a good budget, you must also restrain irrationality.

Consumption, control consumption within a certain range. In most cases, 20% of bank deposits are provided by social security.

If you are a freelancer or a full-time housewife, you should have appropriate commercial insurance on the premise of paying full social security.

3-6 months of basic living expenses, such as monthly living expenses of 2,000 yuan and monthly mortgage of 2,000 yuan, then the emergency fund is 4000x3~4000x6, that is, 12,000~24,000 yuan 10% insurance The Double 10 Law is about home insurance investment

Proportional setting means that the insurance amount should not exceed 10 times the family income, and the total family premium expenditure should account for 10% of the family's annual income.

For example, for a white-collar worker with an annual income of 100,000 yuan, her total life insurance coverage can be simply limited to less than 1 million yuan. If she can afford it, she can buy the full 1 million yuan limit, and if her ability is limited, it can be halved.

The appropriate proportion of premium expenditure should be 10% of the family's annual income, which is consistent with the property allocation structure of the 4321 law.

Remembering the Double 10 Law is helpful for us to allocate insurance reasonably. On the one hand, premium expenditures should not exceed our capabilities, which helps us plan reasonable premium limits; on the other hand, it is to measure whether the selected insurance products are reasonable. Simple

The standard is to judge whether the amount of protection reaches more than 100 times the premium expenditure.

Note: According to the 4321 law, this income distribution proportion model can reasonably allocate property resources, manage and control risks, and minimize losses.

Of course, different families have different financial management goals, risk tolerance, and quality of life indicators, which can be adjusted as needed based on the 4321 law.