07 February 2016

Investment Thumb rules

Few thumb rules help in financial decisions-

1) 100 minus our age should be our equity allocation.

2)Minimum  20 times of our yearly income should be our retirement fund.

3) We all should save minimum 30% of our income

4) Cost of our house should not be more than 6 to 8 times of our family income.

5) EMI should not be more than 35% of our gross monthly income. Zero is the best answer.

6) Rate of returns ideally should beat inflation.

7) Rule of 72 & 115......
How many years double or triple our money ?
* 72/Returns= double in yrs
* 115/ returns = triple in yrs.

8) Rule of 70= Future buying power of your money.
*70/Inflation= Number. of yrs.

9) Life cover should be  Minimum 8 to 10 times of your yearly income.

10) We should keep 3 to 6 months expenses as an emergency fund.

Peple want shortcuts, that's why thumb rules find some place.

Wish you all decipline investing with thumb rules. 😊👍

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