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10 Clever Personal Finance Rules that will help u save more.
1) Rule of 72
2) 100- Age Rule
3) 50-30-20 Rule
4) 1st Week Rule
5) 6X Emergency Fund
6) 20X Term insurance
7) 40% EMI Rule
8) 2X Savings Rule
9) 3*3*3 Plan
10) 25X Retirement Rule.
#PKBOLA Explains👇
1/12
1) Rule of 72
2) 100- Age Rule
3) 50-30-20 Rule
4) 1st Week Rule
5) 6X Emergency Fund
6) 20X Term insurance
7) 40% EMI Rule
8) 2X Savings Rule
9) 3*3*3 Plan
10) 25X Retirement Rule.
#PKBOLA Explains👇
1/12
1. Rule of 72
Always wondering when your money will double ?
This Rule will Help !
Simply Divide 72 by your expected Rate of return.
Ex - if a bond is Giving 10% returns,
Divide 72 by 10 = 7.2 Years
Note - This rule provides close but not exact outcome.
2/12
Always wondering when your money will double ?
This Rule will Help !
Simply Divide 72 by your expected Rate of return.
Ex - if a bond is Giving 10% returns,
Divide 72 by 10 = 7.2 Years
Note - This rule provides close but not exact outcome.
2/12
2. 100 - Age Rule
Worried about asset allocation ? i.e. how much should you invest in Equity vs Fixed income ?
➡️Simply Subtract your age from 100 and that is your allocation to equity
➡️Ex - If your age is 25,
100 - 25 = 75
Thus 75% of your investments should be in… twitter.com/i/web/status/1…
Worried about asset allocation ? i.e. how much should you invest in Equity vs Fixed income ?
➡️Simply Subtract your age from 100 and that is your allocation to equity
➡️Ex - If your age is 25,
100 - 25 = 75
Thus 75% of your investments should be in… twitter.com/i/web/status/1…
3. 50-30-20 Rule
Struggling with budgeting ?
Divide your income like this :
➡️50% Spend on needs (bills, education, transport, food etc)
➡️30% on wants (Holidays, Movies, restaurants etc)
➡️20% Savings and investments
4/12
Struggling with budgeting ?
Divide your income like this :
➡️50% Spend on needs (bills, education, transport, food etc)
➡️30% on wants (Holidays, Movies, restaurants etc)
➡️20% Savings and investments
4/12
4. 1st Week Rule
Remember you had to save and invest 20% of your income?
Do it in the first week of the month, i.e. as soon as you receive your payout.
Don’t wait for all expenses to be over.
This brings discipline in investing.
5/12
Remember you had to save and invest 20% of your income?
Do it in the first week of the month, i.e. as soon as you receive your payout.
Don’t wait for all expenses to be over.
This brings discipline in investing.
5/12
5. 6X emergency fund
Before investing in fancy instruments, ensure that you have parked enough money in your savings account to meet your monthly expenses for 6 months.
I.e if your monthly expenses are 25K, you should park 1.5 lacs in your bank account.
6/12
Before investing in fancy instruments, ensure that you have parked enough money in your savings account to meet your monthly expenses for 6 months.
I.e if your monthly expenses are 25K, you should park 1.5 lacs in your bank account.
6/12
6. 2X Savings rule
➡️Ask your Bank to activate “Auto-Sweep” in your savings account.
It basically increases your yield on savings account to 5-7% by giving you FD like returns while you enjoy Flexibility of a savings account.
7/12
➡️Ask your Bank to activate “Auto-Sweep” in your savings account.
It basically increases your yield on savings account to 5-7% by giving you FD like returns while you enjoy Flexibility of a savings account.
7/12
7. 20X Term Insurance
It says that your Life insurance cover should be 20 times your annual income
Ex- If your annual income is 5 lacs, get a term life cover of 1 crore
8/12
It says that your Life insurance cover should be 20 times your annual income
Ex- If your annual income is 5 lacs, get a term life cover of 1 crore
8/12
8. 40% EMI Rule
The maximum loan you can take should be such that all your EMIs should not eat up more that 40% of your net monthly income
➡️Ex - If you bring home 50K a month, your EMIs should not me more than 20K a month.
9/12
The maximum loan you can take should be such that all your EMIs should not eat up more that 40% of your net monthly income
➡️Ex - If you bring home 50K a month, your EMIs should not me more than 20K a month.
9/12
9. 3*3*3
Components of a Financial plan
3 Critical Components
A) Life insurance
B) Health Insurance
C) Emergency Fund
3 Need based Tools
A) National Pension Scheme
B) Sovereign Gold Bond
C) Debt repayment plan
3 Wealth Creation tools
A) Equity MF
B) Real Estate
C) Stocks… twitter.com/i/web/status/1…
Components of a Financial plan
3 Critical Components
A) Life insurance
B) Health Insurance
C) Emergency Fund
3 Need based Tools
A) National Pension Scheme
B) Sovereign Gold Bond
C) Debt repayment plan
3 Wealth Creation tools
A) Equity MF
B) Real Estate
C) Stocks… twitter.com/i/web/status/1…
25X investment Rule
The rule says that you can think about retirement when you have funds worth 25 times your annual expenses
Ex - If your annual expense is 10 lacs, you can think about retiring if you have a corpus of 2.5 crores.
PS - This is bare minimum, save more if you… twitter.com/i/web/status/1…
The rule says that you can think about retirement when you have funds worth 25 times your annual expenses
Ex - If your annual expense is 10 lacs, you can think about retiring if you have a corpus of 2.5 crores.
PS - This is bare minimum, save more if you… twitter.com/i/web/status/1…
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➡️ Follow @PranjalKamra if you would like to read more of #PKBOLA on
A) Personal Finance
B) Stocks
C) Startups
PS - Do you have a Demat Account ?
Compare India’s Top Demat accounts and earn Rewards… twitter.com/i/web/status/1…
➡️ Follow @PranjalKamra if you would like to read more of #PKBOLA on
A) Personal Finance
B) Stocks
C) Startups
PS - Do you have a Demat Account ?
Compare India’s Top Demat accounts and earn Rewards… twitter.com/i/web/status/1…
Idea credits - @Jainbalwant
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