10 Powerful Thumb rule of Personal Finance - Everyone Should Know ⤵️

1) Rule of 72

The formula estimates the amount of time it takes for an investment to double in value, earning a fixed annual rate of return.

If you earn 6% on your investment annually it will take (72/6=12) 12 years for your investment to double.

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2) 100 minus age rule

The rule is designed to help you determine the asset allocation between equity and debt. You need to subtract your age from the number 100 to get the equity allocation%

If your age is 30, equity allocation should be 70% (100-30)

3) 50/30/20 Rule

This basic rule of thumb is to divide your monthly after-tax income into three spending categories:

50% for needs,

30% for wants

20% for savings or paying off debt

4) The 35 percent rule

The whole idea behind the 35% rule is that , EMI as a percentage of your income should not exceed 35-40%

Anything above that might put a strain on your finances. In case your EMI is more than that, you should avoid taking any more loans.
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