# Some important Personal Finance Rules

**Rule of 72 (Double Your Money)**

**Rule of 114 (Triple)**

**Rule of 144 (Quadruple) **

**Rule of 70 (Inflation)**

**4% Withdrawal Rule**

**100 - Minus Age Rule**

**10, 5, 3 Rule**

**50-30-20 Rule**

**3X Emergency Rule**

**40℅ EMI Rule**

**Life Insurance Rule**

**Rule of 72**

No. of yrs required to double your money at a given rate, U just divide 72 by interest rate

Eg, if you want to know how long it will take to double your money at 8% interest, divide 72 by 8 and get 9 yrs

At 6% rate, it will take 12 yrs

At 9% rate, it will take 8 yrs

**Rule of 114**

No. of years required to triple your money at a given rate, U just divide 114 by interest rate.

For example, if you want to know how long it will take to triple your money at 12% interest, divide 114 by 12 and get 9.5 years

At 6% interest rate, it will take 19yrs

**Rule of 144**

No. of years required to quadruple your money at a given rate, U just divide 144 by interest rate.

For eg, if you want to know how long it will take to quadruple your money at 12% interest, divide 144 by 12 and get 12 yrs.

At 6% interest rate, it will take 24yrs

**Rule of 70**

Divide 70 by current inflation rate to know how fast the value of your investment will get reduced to half its present value.

Inflation rate of 7% will reduce the value of your money to half in 10 years.

**4% Rule for Financial Freedom**

Corpus Required- 25*Annual Expenses

Eg- annual expense is 500,000 then corpus required to retire is 1.25 cr.

Put 50% into fixed income & 50% into equity.

Withdraw 4% every yr, i.e.5 lac.

This rule works for 96% of time in 30 yr period

**100 minus your age rule**

This rule is used for asset allocation. Subtract your age from 100 to find out, how much of your portfolio should be allocated to equities

Age 30

Equity : 70%

Debt : 30%

Age 60

Equity : 40%

Debt : 60%

**10-5-3 Rule**

One should have reasonable returns expectations

10℅ Rate of return - Equity / Mutual Funds

5℅ - Debts ( Fixed Deposits or Other Debt instruments)

3℅ - Savings Account

**50-30-20 Rule - Allocation**

Divide your income into

50℅ - Needs - Groceries, rent, emi

30℅ - Wants - Entertainment, vacations, etc

20℅ - Savings - Equity, MFs, Debt, FD, etc

Atleast try to save 20℅ of your income.

You can definitely save more

**3X Emergency Rule**

Always put at least 3 times your monthly income in Emergency funds for emergencies such as Loss of employment, medical emergency, etc.

3 X Monthly Income

You can have around 6 X Monthly Income to be on a safer side

**40℅ EMI Rule**

Never go beyond 40℅ of your income into EMIs.

Say you earn, 50,000 per month. So you should not have EMIs more than 20,000 .

This Rule is generally used by Finance companies to provide loans. You can use it to manage your finances.

***Life Insurance Rule ***

Always have Sum Assured as 20 times of your Annual Income

20 X Annual Income

Say you earn 5 Lacs annually, u should at least have 1 crore insurance by following this Rule