Thumb rules of investing 👍
Do you follow any of this rules?
Read till end to know how thumb rules work
A thread 🧵🧵
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Do you follow any of this rules?
Read till end to know how thumb rules work
A thread 🧵🧵
✅Retweet for max reach
Rule No. 1 :
10/5/3 rule
How much rate of returns to expect from equity, debt instruments and savings account
Equity : 10%
Debt : 5%
Savings Account : 3%
10/5/3 rule
How much rate of returns to expect from equity, debt instruments and savings account
Equity : 10%
Debt : 5%
Savings Account : 3%
Rule No. 2 :
100 Age rule of asset allocation
subtract your age from 100 to find how much of your portfolio should be allocated to equity
Example: Current age : 20 yrs
percentage allocation : 100- 20 = 80
It means 80% of your portfolio can be allocated to equity.
100 Age rule of asset allocation
subtract your age from 100 to find how much of your portfolio should be allocated to equity
Example: Current age : 20 yrs
percentage allocation : 100- 20 = 80
It means 80% of your portfolio can be allocated to equity.
Rule No. 3 :
Pay yourself first rule
Right from your first salary, 10 percent of your income should go into a retirement fund
Salary / Month : 30000
10% of 30000 = 3000
So, 3000 should go to retirement fund, increase the amount as your income increases.
Pay yourself first rule
Right from your first salary, 10 percent of your income should go into a retirement fund
Salary / Month : 30000
10% of 30000 = 3000
So, 3000 should go to retirement fund, increase the amount as your income increases.
Rule No. 4 :
Rule of 70 to predict your future buying power
Divide 70 by the current inflation rate to know how fast the value of your investment will get reduced to half of its precent value
Inflation : 7 %
Your money will be half in : 70/7 = 10 Yrs.
Rule of 70 to predict your future buying power
Divide 70 by the current inflation rate to know how fast the value of your investment will get reduced to half of its precent value
Inflation : 7 %
Your money will be half in : 70/7 = 10 Yrs.
Rule No. 5 :
The emergency fund rule
Put away at least 3- 6 months worth of expenses in a liquid savings account
Monthly expenses : 10000
Emergency fund : 60000
The emergency fund rule
Put away at least 3- 6 months worth of expenses in a liquid savings account
Monthly expenses : 10000
Emergency fund : 60000
Rule No. 6 :
The 4 % rule withdrawal rule for retirement
How much should you withdraw after retirement? use 4 % rule
Retirement fund : 10 Cr
Yearly withdrawal : 40 L
The 4 % rule withdrawal rule for retirement
How much should you withdraw after retirement? use 4 % rule
Retirement fund : 10 Cr
Yearly withdrawal : 40 L
Rule No. 7 :
40% EMI rule
EMI make a major dent on your budget, hence it is advisable to not exceed 40 percent of your salary
Earnings / month : 50000
Max EMIs : 20000 Month
40% EMI rule
EMI make a major dent on your budget, hence it is advisable to not exceed 40 percent of your salary
Earnings / month : 50000
Max EMIs : 20000 Month
Rule No. 8 :
Life insurance rule
Sum assured for LIC should be at least 20 times of your income
Income / year : 5 Lacs
Insurance sum assured : 1 Crore
It is only a thumb rule, actual sum should be determined on the basis of other many factors.
Life insurance rule
Sum assured for LIC should be at least 20 times of your income
Income / year : 5 Lacs
Insurance sum assured : 1 Crore
It is only a thumb rule, actual sum should be determined on the basis of other many factors.
This is how thumb rules are made on investing,
I believe one should start at very young age, no harm in starting at any age
The above thread is to educate us on thumb rules, please let me know in comments section if you follow any of them👇
I believe one should start at very young age, no harm in starting at any age
The above thread is to educate us on thumb rules, please let me know in comments section if you follow any of them👇
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