10 financial rules I didn't learn until I was 30.
Had I learned these sooner, I would have achieved millionaire status much faster.
If you're in your 20s, learn these and become wealthy before you turn 35...
Had I learned these sooner, I would have achieved millionaire status much faster.
If you're in your 20s, learn these and become wealthy before you turn 35...
Rule #1 on Budgeting:
* The 50/30/20 rule
The popular rule for budgeting your income.
* 50% for necessities (housing/bills)
* 30% for wants (dining/entertainment)
* 20% for financial goals (debt payoff/retirement)
* The 50/30/20 rule
The popular rule for budgeting your income.
* 50% for necessities (housing/bills)
* 30% for wants (dining/entertainment)
* 20% for financial goals (debt payoff/retirement)
Spend 50% of your net income on your needs:
* Rent or mortgage
* Utilities
* Insurance and healthcare
* Groceries
Spend 20% on your monthly savings and debt:
* Retirement accounts (401(k), IRAs)
* Above-minimum payments on loans and debt
* Emergency fund contributions
* Rent or mortgage
* Utilities
* Insurance and healthcare
* Groceries
Spend 20% on your monthly savings and debt:
* Retirement accounts (401(k), IRAs)
* Above-minimum payments on loans and debt
* Emergency fund contributions
Final 30% is used for wants:
* Eating out at restaurants
* Tech accessories
* Concerts, travel
* Streaming services
Your income, monthly expenses, and existing savings will tell you how much to save every month.
@WhiteBoardFin shares more here:
youtu.be
* Eating out at restaurants
* Tech accessories
* Concerts, travel
* Streaming services
Your income, monthly expenses, and existing savings will tell you how much to save every month.
@WhiteBoardFin shares more here:
youtu.be
@WhiteBoardFin Rule #2 buying a car:
* The 20/4/10 rule
When buying a car, you should:
* Put down at least 20%
* Keep your car loan limited to 4 years (to avoid interest)
* Spend no more than 10% of your gross income
Also, please remember that "reliable transportation" is NOT a new car.
* The 20/4/10 rule
When buying a car, you should:
* Put down at least 20%
* Keep your car loan limited to 4 years (to avoid interest)
* Spend no more than 10% of your gross income
Also, please remember that "reliable transportation" is NOT a new car.
@WhiteBoardFin Rule #3 on buying new vs used:
* The 10-year rule
This rule has to do with whether to buy a car new versus used.
If you want to maximize your car’s value, you should either buy a used, or buy new and drive the car for ten years.
* The 10-year rule
This rule has to do with whether to buy a car new versus used.
If you want to maximize your car’s value, you should either buy a used, or buy new and drive the car for ten years.
@WhiteBoardFin Rule #4 on buying a home:
* The 20% rule
You should put at least 20% down when buying a home.
This is a good rule to follow because it will prevent you from becoming house poor.
* The 20% rule
You should put at least 20% down when buying a home.
This is a good rule to follow because it will prevent you from becoming house poor.
@WhiteBoardFin Rule #5 on how much house can you afford:
* The income rule
Don’t buy a house that costs more than three years’ worth of your gross annual income.
Some variations say no more than two years; others say two and a half.
* The income rule
Don’t buy a house that costs more than three years’ worth of your gross annual income.
Some variations say no more than two years; others say two and a half.
@WhiteBoardFin Rule #6 on percentage saving for retirement:
* The 10% rule
Save 10% of your income for retirement” is a very common rule of thumb.
While 10% is a simple rule to follow, the percentage doesn’t consider how much you may need in retirement.
* The 10% rule
Save 10% of your income for retirement” is a very common rule of thumb.
While 10% is a simple rule to follow, the percentage doesn’t consider how much you may need in retirement.
@WhiteBoardFin Rule #7 on your income savings for retirement:
* The retirement income rule
You should save 20x your gross annual income.
For those chasing F.I.R.E., this is a key calculation needed to determine how much to ramp up your savings.
* The retirement income rule
You should save 20x your gross annual income.
For those chasing F.I.R.E., this is a key calculation needed to determine how much to ramp up your savings.
@WhiteBoardFin Rule #8 on student loans:
* The first-year salary rule
Only 46% of students consider their future salary when borrowing student loans
A good rule of thumb: do not borrow in total more than you expect to earn in your first year out of school.
* The first-year salary rule
Only 46% of students consider their future salary when borrowing student loans
A good rule of thumb: do not borrow in total more than you expect to earn in your first year out of school.
@WhiteBoardFin Rule #9 on saving:
* The 6-month emergency fund rule
56% of Americans can’t cover a $1,000 emergency expense with savings
That's why having 6 months’ worth of savings on hand in case of an emergency is crucial.
Start small.
First goal is $1,000 and then build from there.
* The 6-month emergency fund rule
56% of Americans can’t cover a $1,000 emergency expense with savings
That's why having 6 months’ worth of savings on hand in case of an emergency is crucial.
Start small.
First goal is $1,000 and then build from there.
@WhiteBoardFin Rule #10 on risk:
* The age rule for stocks
When investing, bonds are generally less risky than stocks.
The rule is the older you get, the less you should invest in stocks.
Subtract your age from 120; that’s the percentage of your portfolio that should be in stocks.
* The age rule for stocks
When investing, bonds are generally less risky than stocks.
The rule is the older you get, the less you should invest in stocks.
Subtract your age from 120; that’s the percentage of your portfolio that should be in stocks.
@WhiteBoardFin Want more financial rules to set you up for success and achieve financial freedom?
Check out this massive list on the blog:
goodfinancialcents.com
Check out this massive list on the blog:
goodfinancialcents.com
@WhiteBoardFin If you enjoyed this thread, I’d appreciate a RT of the first tweet.
I create content on:
- Wealth hacking
- Income acceleration
- Online business and entrepreneurship
Follow me for a fun journey toward financial freedom:
@jjeffrose
I create content on:
- Wealth hacking
- Income acceleration
- Online business and entrepreneurship
Follow me for a fun journey toward financial freedom:
@jjeffrose
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