Career is the biggest asset, but not the only one. Understanding the ever changing dynamic of stock market, real estate and commodities (gold and silver) requires more time and expertise than most people busy building their career have. There are financial planner and investment guides to help make intelligent investment choices there are also some financial thumb rules that are evergreen. If combine with good investment these rules will keep you on secure in a financially secure path.
Here are such rules:-
Rule of 72:- This tells you in how much time your money will double. Divide 72 by the interest rate at which you are compounding your money, and you will arrive at the number of years it will take to double in value.
The 10, 5, 3 rule:- This is a neat little that states that you can expect return 10% from equities, 5% from bonds and 3% from liquid cash and cash like accounts .
The emergency fund rule:- Put away at least 3 - 6 month worth of expense in a liquid saving account to ensure it is available at short notice.
100 minus your age rule:- This rule is used for asset allocation. Subtract your age from 100 to find how much of your portfolio should be allocated to equity or debt. Example 30 years of age 70% fund in equity, 30% in debt and 60 years of age 40% fund in equity, 60% fund in debt.
Rule of 144:- This rule tell you that in how much time your investment quadruple in value. For instance, if interest rate is 12%, Rs 10, 000 becomes Rs 40, 000 in 12 years.