7 Personal Finance Rules that will help you save more money
1) Rule of 72
2) 100- Age Rule
3) 50-30-20 Rule
4) 1st Week Rule
5) 6X Emergency Fund
6) 40% EMI Rule
7) 25X Retirement Rule.
1) Rule of 72
2) 100- Age Rule
3) 50-30-20 Rule
4) 1st Week Rule
5) 6X Emergency Fund
6) 40% EMI Rule
7) 25X Retirement Rule.
1) Rule of 72
You know how long it takes to double your money?
Divide your expected return by 72 to find out.
Example: when your expected return is equal to 10% you double your money every 7.2 years (72/10).
You know how long it takes to double your money?
Divide your expected return by 72 to find out.
Example: when your expected return is equal to 10% you double your money every 7.2 years (72/10).
2) 100- Age Rule
You want to know how much % of your assets you should invest in equity?
Subtract 100 by your ago to find out.
Example: when you're 40 years old you should invest 60% of your assets in stocks.
You want to know how much % of your assets you should invest in equity?
Subtract 100 by your ago to find out.
Example: when you're 40 years old you should invest 60% of your assets in stocks.
3) 50-30-20 Rule
Here's how to budget your income:
➡️ 50% Spend on needs (bills, education, transport, food etc)
➡️ 30% on wants (Holidays, Movies, restaurants etc)
➡️ 20% Savings and investments
Here's how to budget your income:
➡️ 50% Spend on needs (bills, education, transport, food etc)
➡️ 30% on wants (Holidays, Movies, restaurants etc)
➡️ 20% Savings and investments
4) 1st Week Rule
The best way to create wealth is to pay yourself first.
Invest 10-20% of your income and always put it aside in the first week of the month.
The best way to create wealth is to pay yourself first.
Invest 10-20% of your income and always put it aside in the first week of the month.
5) 6X Emergency Fund
Before you invest, make sure you have an emergency fund.
Your emergency fund should be equal to 6x your monthly income.
If you earn $6k a month, your emegency fund should have $36k.
Before you invest, make sure you have an emergency fund.
Your emergency fund should be equal to 6x your monthly income.
If you earn $6k a month, your emegency fund should have $36k.
6) 40% EMI Rule
The maximum loan you can take should not eat up more that 40% of your net monthly income.
You earn $10k per month? In that case you take a mortgage for maximum $4k per month.
The maximum loan you can take should not eat up more that 40% of your net monthly income.
You earn $10k per month? In that case you take a mortgage for maximum $4k per month.
7) 25X investment Rule
This rule says that u can think about retirement when u have funds worth 25 times your annual expenses.
You need $50,000 per year to live? In that case you should have at least $1.25 million to retire.
This rule says that u can think about retirement when u have funds worth 25 times your annual expenses.
You need $50,000 per year to live? In that case you should have at least $1.25 million to retire.
That's it for today.
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Some great personal finance rules:
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