Few thumb rules help in financial decisions-
.
Rate of returns ideally should beat inflation.
We all should save minimum 30% of our income
We should keep 3 to 6 months expenses as an emergency fund.
Cost of our house should not be more than 6 to 8 times of our family income.
EMI should not be more than 35% of our gross monthly income.
Zero is the best answer.
6)Minimum 10 times of our yearly income should be our retirement fund.
- Rule of 72 & 115......
How many years double or triple our money ?
72/Returns= double in yrs
115/ returns = triple in yrs.
Rule of 70= Future buying power of your money.
*70/Inflation= Number. of yrs.100 minus our age should be our equity allocation
Life cover should be Minimum 8 to 10 times of your yearly income.
Moral-
Peple want shortcuts, that's why thumb rules find some place.