Step towards financial freedom
Talks about #personalfinance #investments
Personal Finance • 1031 • 0
As a rule of thumb, you should allocate your budget as follows: 50% - "needs," 30% - "wants," and 20% - Investments.
7-Day Rule is a method for avoiding impulsive purchasing. In this, you
allow yourself a seven-day "cooling-off time" before making purchases.
After 7 Days you can decide whether you still want that item or
not and purchase accordingly.
Do you want
to double your money and want to know when your money will double? The
simple formula is to divide 72 by the current rate of return to find the
time it needs to double your money. By doing so you can predict when
your money will double. For example, if your current mutual fund return
is 12%, then it will take 6 years (72/12) to double your money. You can
use 72 divided by the number of years to get the rate of returns
required from a financial instrument to double your investment.
The 3x emergency fund rule is that one should always have three times of their monthly income set aside for emergencies. It will be helpful in case of emergencies, such as job loss, sudden travel or medical emergency, etc.
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