1. 50 - 20 - 30 rule
This rule is as clear as its numbers. You will have to divide your amount into three parts. After tax, 50% of the salary will have to be kept for household expenses. 20% will have to be kept for short-term needs and 30% will have to be invested for future needs.
2. 15 -15 - 15 rule
These rules are for those who believe in long term investments. In this, Rs 15,000 has to be invested every month for 15 years in an asset which gives an annual return of 15%. Investment in equity is suitable for this. Because despite the ups and downs in the stock market, the stock market has always ensured to give 15% returns in the long term.
3. Rule of 72
This rule tells the time taken to double money. Divide 72 by the potential return or interest rate and see. If you get 15% return on investment in SIP, then to get the time taken to double it, you can divide 72 by 15, which will be equal to 4.8 years.
4. Rule of 114
This rule calculates the time taken to triple an amount. You can find this time by dividing 114 by the expected interest rate. For example, if your investment gives you an annual return of 15%, then divide 114 by 15, which is equal to 7.6 years.
5. 100 minus age
This is regarding allotment of property. Subtract your age from 100. The number you get will be the percentage you should invest in the stock market. This rule is based on the fact that the younger you are, the greater your risk appetite. You will also be able to compensate for the losses you incur during this period.…