9 Personal Finance Rules for You
Rule of 72 Double Your Money
Divide the Rate of Intrest of Investment with 72. You will get the Years for Doubling Your Money.
Rule of 70 of Inflation
Divide 70 by the Current Inflation Rate to know when the Value of Investment will get reduced to Half its Present Value.
4 % Rule for Financial Freedom
Corpus Required is 25 Times of Annual Expenses. Take 50 % as Fixed Income & Put 50 % in Equity.
100 Minus Your Age Rule for Asset Allocation
Subtract Your Age from 100 to Get Your Portfolio Allocation % needed for Equities.
10-5-3 Rule for Returns
10 ℅ Rate of Return for Equity & Mutual Funds, 5℅ Debts for Fixed Deposits or Other Debt Instruments, 3℅ for Bank Savings Account
50-30-20 Rule of Income
Divide your Income 50% for Everyday Needs, 30% for Lifestyle Wants, 20% for Savings.
3X Emergency Fund Rule
Keep 3 Times Your Monthly Income as Emergency Funds or Liquid.
40℅ EMI Rule
Your EMIs should never go Beyond 40℅ of Your Income.
Life Insurance Rule
Always have Sum Assured as 20 Times of Your Annual Income.
These #9 Rules may be favourable for many & may not be suitable to others. It is always advised to invest and save in life for future needs & happiness.
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