Folder Managment

I have a problem with managing my folders in unreal, whenever I want to clean up how it looks like I end up having a problem to find anything. I have 2 ideas on how to do it, tell me which one is better.

First one looks like this:

 |--Static Meshes
 |  |--Rocks
 |  |--Trees
 |  |--Walls
 |--Blueprints
 |  |--Player
 |  |--Enemies
 |  |--Bombs
 |--Materials
|  |--Rocks
|  |--Trees
|  |--Walls

And the second one:

 |--Characters
 |  |--Player
 |  |  |--Blueprints
 |  |  |--Materials
 |  |  |--Skeletal Meshes
 |  |  |--Animations
 |-Decorations
 |  |--Trees
 |  |  |--Materials
|  |  |--Static Meshes
|  |--Rocks
|  |  |--Materials
|  |  |--Static Meshes

etc.

In the first one, I want to split everything into categories like Static Meshes or Materials but in the second one, I want to keep everything related to the e.g. player in one folder. So what do you think about them? Which one is better? Maybe you have other techniques that you can share with me and help me learn how to manage folders?

I’m currently using an approach similar to your second example where you organize by “who” owns the assets; this is a helpful approach when solodeving but I’ve found that when you’ve a team it is better to take an approach like your first example, since people are dedicated to their specific leg of content creation.