From Nookipedia, the Animal Crossing wiki
Feng Shui (Pronounced ˌfʌŋˈʃweɪ, "fung-shway") is an old Chinese practice in which furniture and items are arranged in a certain way to increase the flow of positive energy throughout a house. In the Animal Crossing series, the arrangement of items according to its own Feng Shui principles are reported to bring luck with money and items. Feng Shui is applicable only to the first room of the house. Most of the Normal villagers ask the Player about Feng Shui.
Principles of Feng Shui
There are two ways to effect Feng Shui: By placing items of certain colors in their correct areas of the room, and by placing 'lucky' items anywhere in the room.
Every object has a color assigned to it. These can be red, yellow,or green. Feng Shui works by matching the color of the items to their appropriate squares in the room. The two rows of squares closest to the west (left) wall are yellow. The two closest to the southern (lower) wall are green. Finally, those two which are closest to the east (right) wall are red. In the corners where they overlap, the squares have both colors. As the player pays off mortgage and the room expands, the player can have non-Feng Shui tiles in the middle. Diagrams showing the arrangement of colors in the room can be seen below.
Some items are lucky and bring good Feng Shui no matter where they are placed. Some of these also have colors which are used in Feng Shui and can therefore bring twice as much good luck to the player's house.
Benefits of Feng Shui
Good yellow Feng Shui will bring luck with money, increasing the number of bells given to the player by villagers as rewards for helping them. Bells are more likely to drop when the player shakes trees as well as the number of bells that fall increasing from 100 to 200. The number of bells dropped from the money rock will also increase up to a max of 32,000.
Good red Feng Shui will bring luck with items. One may find an increased number of items from outside one's furniture group in Tom Nook's store. Items are also more likely to fall when the player shakes trees.
Good green Feng Shui will bring overall luck.