Unlocking Wealth

Dec 28, 2022

Rajeev Kumar

The rule requires you to keep 50% of your post-tax salary for household expenses, 20% for short term goals, including money for a rainy day, and 30% for long term goals.

This is a how to be a crorepati equation. It requires an investor to save Rs 15,000 per month for a duration of 15 years in an instrument that generates a 15% return.

Rule of 72 is used to calculate the time it takes to double your money. Dividing 72 by expected interest rate will give you an idea of the time it will take to double your investment.

Rule of 114 is used to calculate the time taken to triple your money. Dividing 114 by the expected ROI will give the desired period.

The time it will take to quadruple your money can be found by dividing 144 by the expected ROI.

This rule is prescribed for asset allocation. Your age needs to be subtracted from 100 to arrive at a number that tells you your allocation in equities.

The mathematical rules of personal finance can help you in money management, investment planning and meeting various financial goals.