How to become rich: Nine golden personal finance rules that may help you make money
Personal finance has to do with the way you handle your money. Everybody just simply wants a hack that can multiply their money manifolds. Amassing wealth is not like a two-minute instant noodle, it's a process that involves a balance of budgeting, saving, and investing. Of course, there are some thumb rules when it comes to personal finance. These thumb rules can be used by those who are just beginning their financial journey as well as others who are already on their path. There's no ‘one size fits all’ funda and these rules only provide you with a basic understanding.
Nine personal finance rules that everyone should follow right from today to take control of their money and become rich.
The ‘Rule of 72’ gives you an estimate of the number of years it will take to double your money in a particular investment tool. You need to divide the rate of returns by 72 to know the time it would take you to double your investments.
According to Ashish Aggarwal, MD, Acube Ventures, anything that expands at a compound rate, including the population, macroeconomic data, charges, or debts, may be subject to the Rule of 72. The economy is predicted to double in 72 / 4% = 18 years if the GDP expands at a rate of 4% per year.
“The Rule of 72 can be used to illustrate the long-term implications of these charges to the fee that reduces investment gains. The investment principal of a mutual fund with a 3% annual expense fee will be cut in half in about 24 years. In six years, the amount owed by a borrower who pays 12% interest on their credit card (or any other type of loan that has a compound interest) will have doubled," said Ashish Aggarwal.
The basic principle behind age-based asset allocation is that your exposure to investment risk
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