Financial Rules That Can Transform Your Money Management Rule no. 1. Rule of 72 : Doubling Your Investment The Rule of 72 is a handy mental shortcut to estimate how long it will take for an investment to double. Here's how it works: Formula: Years to Double = 72 / Annual Interest Rate (As per percentage) For example: If you invest ₹1 lakh at 6% interest, divide 72 by 6 to get 12 years. So, your ₹1 lakh will become ₹2 lakhs in approximately 12 years. Rule no. 2. The 0.04 Rule : Smart Spending without Touching Your Salary The 0.04 Rule helps you manage spending without affecting your regular income: Formula: Divide the desired spending amount by 0.04 (which represents a 4% return). Example : If you want to spend ₹1500, divide it by 0.04: ₹1500 / 0.04 = ₹37,500. Invest ₹37,500 in something that yields a 4% return, and that 4% will generate the ₹1500 you need without dipping into your pocket. Rule no. 3. 100 Minus Age Rule : Balancing Stocks and Bonds The 100 Minus Age Ru
by Maneesh