before discussing how to invest, we should have a look at whether all the money is put in the right place.

how do we allocate our assets well to help us maintain and increase the value of family assets effectively?

standard & poor's family assets quadrant chart, which is divided into four parts by two axes horizontally and vertically, can be regarded as four accounts or four baskets, and we should put all our money into these four baskets.

don't put your eggs in one basket. Put it in the following four baskets

the first basket:

First put the money we usually spend to meet our basic consumption, such as daily eating, living and traveling. One of the biggest characteristics of this money is that it requires particularly high liquidity. The money is used in the bank's current deposit. Of course, the money fund is better. It is used for investment and requires access at any time. Then if we use the money fund, the interest will be slightly higher than that of this current deposit, and we can still see the income every day. Then this part of the money should generally be enough for our family's living expenses for 3 to 6 months, and generally it is a reasonable proportion of 1% of family assets.

The second basket:

It should be some life-saving money, that is, some funds we use for some life-saving consumption. For a family, at least 2% of the funds should be used for this life-saving consumption. For example, on the basis of this five insurances and one gold, we should buy some additional commercial insurance for our family, such as this critical illness insurance, life insurance, accident insurance and so on. There is still a part of the insurance expenditure, because we may encounter some unexpected situations in our lives. Therefore, we should keep some of this reserve fund to deal with these unexpected situations. We can usually do some financial management with good liquidity just like the money we usually spend, but we should pay attention to it, and we should leave it there for special purposes.

The third basket:

If we want to put the money that we can generate money, and it is the money that can get relatively high returns, then the high returns we are talking about are products that can get high returns and floating returns, such as stocks, funds, etc., not the kind of high-interest financial management scam that promises dozens or even hundreds of percent. High returns are also accompanied by high risks, so when you make this part of the investment, you must have a good attitude towards this investment and have corresponding professional investment knowledge. This part of the money accounts for 3% of the family assets.

The fourth basket:

We hope to manage our wealth steadily and properly, not to lose money, as long as we can beat inflation. We should release the money we want to use to protect the capital and appreciate, for example, to invest in some slightly less risky, such as trusts, bonds, funds, etc., so as to gain some stable and fixed income with peace of mind. That part of the money accounts for the largest proportion in the whole family assets, accounting for 4%. However, every family's asset allocation plan should be analyzed and treated differently based on the differences of different assets, asset scale, anti-risk ability, and the age of family members. This simplest 1234 principle can be used as a basic reference.

Avoiding risks and increasing wealth

"Asset allocation theory" is an investment method to develop diversified portfolio. It is to consider all kinds of assets, such as stocks, bonds or cash, according to the changing proportion and location, and make diversified investments.

Investment and financial management has become a necessity in people's daily life, and many people begin to set foot in asset allocation for maintaining and increasing the value of family assets. When faced with a wide variety of investment projects and tools with different risks, how to make reasonable allocation and scientific financial management can make the return and risk of investment reach the best balance point

As for the allocation of family assets, the usual steps are as follows:

1. Before allocating family assets, it is most important to make an inventory of family assets, so as to know the current income source, income type and distribution, expenditure classification, current asset list, etc.

2. As the allocation of family assets is a long-term work, it needs to be matched with family financial management goals, such as how long it will take to achieve what financial management goals, and matching the goals with income and expenditure and assets, so as to make a reasonable allocation plan for family assets.

3. According to the actual situation of the family, we should set up a part for daily expenses. This part of the money is used as the family living expenses, usually in the form of current savings or monetary funds, from which the expenses of food, clothing, housing and transportation of each family member are paid.

4. Then, set aside the funds for value preservation, accounting for about 2%-3% of the total. This is the money for family value preservation, which is used to cope with inflation, accidents and serious diseases, usually in the form of bonds, trusts and insurance.

5. The investment funds are used by families to increase their value, and this part is used to increase the value of family assets, usually in the form of stocks, funds and other investments that families are best at.

6. The last part of the allocation is the long-term allocation of family assets, which is an account used for long-term investment, including pension, children's education, etc. Because it is a long-term account, it needs to be relatively safe and have a moderate rate of return, usually in the form of index fund fixed investment, real estate, etc.

This diagram can be explained clearly:

Or: planning-strategy-configuration-optimization, and so on.

For example, a family needs to spend money in the next year:

Then, all the money to be spent can be sorted:

Then, it should be understood that different investment wage instruments have different returns and different risk coefficients

Next, the expenditure and income are paired

To achieve the set income target, several sub-targets need to be set:

The annual interest rate target of average household debt;

the debt ratio of households, that is, the target of net total ratio;

annualized rate of return targets of different sectors;

set your own average annual interest rate on debt, and take this indicator as one of the debt optimization goals.

for example, the average annual interest rate of debt is 6%, 8%, 1%, 12%, 15% and so on.

then set the target annualized rate of return:

1. The guaranteed income portfolio

can ensure the security of principal and the guaranteed rate of return, and the target annualized rate of return is 1%

2. The guaranteed income portfolio

can ensure the security of principal but cannot guarantee the rate of return, and the target annualized rate of return is 15%

3. The guaranteed income portfolio

cannot.

Our ultimate goal is:

The income (rate of return, net total ratio, annual interest rate of liabilities) is greater than the expenditure (ideal living expenses)

Next, we will share some laws that can be referred to in the process of asset allocation:

1. Financial management 72 rules. This rule can quickly calculate the relationship between financial income and time.

if we have a wealth management with an annual interest rate of X% and compound interest, then divide 72 by x, and the figure is the number of years required to double the sum of principal and interest. For example, if you deposit 1, yuan in the bank now, the interest rate will be 6% every year, and the interest will roll every year. So, how long does it take for the deposit to become 2 thousand? Divide 72 by 6 is the answer, which is 12 years.

2. Rule 4321

"Rule 4321" is an investment law summarized by people in their long-term financial planning, which is used to guide people in the allocation of funds when investing. Its contents are as follows:

4% of the income is used for investment to create wealth and to increase the value of wealth. Such as buying real estate, wealth management insurance products, stocks or funds, etc.;

3% of the income is used for family living expenses to ensure the basic living consumption demand;

2% of the income is devoted to the preservation of wealth, and at the same time, it has the liquidity of quick cash;

1% of the income is used for insurance planning and life risk management.

"Rule p>“4321" is an investment law with practical value, and it is reasonable to spend family finance according to this rule.

3. Three Golden Principles of Asset Allocation

Asset allocation that meets the "Three Golden Principles" is a relatively scientific, balanced, stable and high-gold allocation. These three principles are cross-asset category allocation, cross-regional country allocation and alternative asset allocation.

Cross-asset class allocation, that is, "putting eggs in different baskets". In the investment portfolio, it should include five types of assets: insurance protection assets, fixed income, real estate finance, secondary market and private equity venture capital.

different types of assets have different matching of risk and return. Scientifically allocating different types of assets and matching them with each other can achieve the effect of balancing risks and benefits.

Cross-regional and cross-national asset allocation requires investors to allocate assets not only in the domestic market, but also in a single currency, and to reduce the relevance of assets.

To connect with the international market and improve asset returns, the best choice is to invest across regions, hold multiple currencies and spread exchange rate risks.

alternative asset allocation can gain high returns, but the accompanying risk coefficient is also relatively high, represented by private equity, venture capital and parent funds. This kind of asset allocation is more suitable for high-risk groups with high risk appetite and large asset coefficient.

4. Law of 8

Law of 8 is a law to predict the investment risk tolerance. In this law, the proportion of venture capital depends on the age. The specific rule is: the number obtained by subtracting age from 8 is the reasonable proportion of high-risk investment in total assets.

high-risk investable amount =(8- your age) *1% For example, for a 3-year-old person, high-risk investment accounts for 5% of the total assets. At the age of 6, the reasonable proportion is 2%

The proportion of high-risk assets is inversely proportional to age. Because with the growth of age, people's ability to resist risks decreases, and the proportion of venture capital needs to be gradually reduced. As a long-term financial management tool, the proportion of insurance should be gradually increased.

5. Double 1 Law

Double 1 Law means:

A. The annual premium should account for 1/1 of the annual household income;

B, the insurance amount should be 1 times the annual income.

We should fully refer to the insurance principle of "Double Ten Laws" when making scientific, reasonable and effective orders and evaluations of individual and family insurance plans. With sufficient insurance coverage, the family's wealth resilience will be strong when risks come.

1. Rule 72 of financial management

2. Rule 4321

3. Three golden principles of asset allocation

4. Rule 8

5. Rule 1

Remove risks, and the rest is profit.

Conclusion: No matter what kind of investment you make, the concept of asset allocation must go ahead. In the attribution analysis of investment profits, more than 9% of the profits are determined by reasonable asset allocation forms. So:

Scientific asset allocation is the key to the success of long-term investment.