𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗥𝘂𝗹𝗲𝘀

– Rule of 72 (Double Your Money)
– Rule of 70 (Inflation)
– 4% Withdrawal Rule
– 100 Minus Age Rule
– 10, 5, 3 Rule
– 50-30-20 Rule
– 3X Emergency Rule
– 40℅ EMI Rule
– Life Insurance Rule

𝗥𝘂𝗹𝗲 𝗼𝗳 𝟳𝟮
No. of yrs required to double your money at a given rate, U just divide 72 by interest rate
Eg, if you want to know how long it will take to double your money at 8% interest, divide 72 by 8 and get 9 yrs

At 6% rate, it will take 12 yrs
At 9% rate, it will take 8 yrs

𝗥𝘂𝗹𝗲 𝗼𝗳 𝟳𝟬
Divide 70 by current inflation rate to know how fast the value of your investment will get reduced to half its present value.
Inflation rate of 7% will reduce the value of your money to half in 10 years.

𝟰% 𝗥𝘂𝗹𝗲 𝗳𝗼𝗿 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗙𝗿𝗲𝗲𝗱𝗼𝗺
Corpus Reqd = 25 times of your estimated Annual Expenses.

Eg- if your annual expense after 50 years of age is 500,000 and you wish to take VRS then corpus with you required is 1.25 cr.

Put 50% of this into fixed income & 50% into equity.

Withdraw 4% every yr, i.e.5 lac.

This rule works for 96% of time in 30 yr period

𝟭𝟬𝟬 𝗺𝗶𝗻𝘂𝘀 𝘆𝗼𝘂𝗿 𝗮𝗴𝗲 𝗿𝘂𝗹𝗲
This rule is used for asset allocation. Subtract your age from 100 to find out, how much of your portfolio should be allocated to equities

Suppose your Age is 30 so (100 – 30 = 70)

Equity : 70%
Debt : 30%

But if your Age is 60 so (100 – 60 = 40)
Equity : 40%
Debt : 60%

𝟭𝟬-𝟱-𝟯 𝗥𝘂𝗹𝗲
One should have reasonable returns expectations

10℅ Rate of return – Equity / Mutual Funds
5℅ – Debts ( Fixed Deposits or Other Debt instruments)
3℅ – Savings Account

𝟱𝟬-𝟯𝟬-𝟮𝟬 𝗥𝘂𝗹𝗲 – 𝗮𝗯𝗼𝘂𝘁 𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗶𝗻𝗰𝗼𝗺𝗲 𝘁𝗼 𝗲𝘅𝗽𝗲𝗻𝘀𝗲
Divide your income into
50℅ – Needs (Groceries, rent, emi, etc)
30℅ – Wants (Entertainment, vacations, etc)
20℅ – Savings (Equity, MFs, Debt, FD, etc)

Atleast try to save 20℅ of your income.
You can definitely save more

𝟯𝗫 𝗘𝗺𝗲𝗿𝗴𝗲𝗻𝗰𝘆 𝗥𝘂𝗹𝗲
Always put atleast 3 times your monthly income in Emergency funds for emergencies such as Loss of employment, medical emergency, etc.

3 X Monthly Income
In fact, one can have around 6 X Monthly Income in liquid or near liquid assets to be on a safer side

𝟰𝟬℅ 𝗘𝗠𝗜 𝗥𝘂𝗹𝗲
Never go beyond 40℅ of your income into EMIs.

Say you earn, 50,000 per month. So you should not have EMIs more than 20,000 .

This Rule is generally used by Finance companies to provide loans. You can use it to manage your finances.

𝗟𝗶𝗳𝗲 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗥𝘂𝗹𝗲
Always have Sum Assured as 20 times of your Annual Income

20 X Annual Income
Say you earn 5 Lacs annually, u shud atleast have 1 crore insurance by following this Rule

𝗧𝗵𝗲𝘀𝗲 𝗿𝘂𝗹𝗲𝘀 𝗮𝗿𝗲 𝗲𝗾𝘂𝗮𝗹𝗹𝘆 𝘂𝘀𝗲𝗳𝘂𝗹 𝗳𝗼𝗿 𝘆𝗼𝘂𝗻𝗴, 𝘆𝗼𝘂𝘁𝗵 𝗮𝗻𝗱 𝗼𝗹𝗱.