Investment; Here Are The 5 Thumb Rules For Every Investor

Rue to follow-

1. Rule of 72 - This involves a simple method for calculating the number of years in which the amount invested can be doubled.

2. Rule of 144

This rule helps one in calculating how many years one can get four-fold returns on investment. Like the Rule of 72, investors must divide the annual return rate by 144 to determine the number of years required to achieve four-fold returns.

3. Inflation Thumb Rule

The rule of 70 indicates that the value of current wealth will diminish over time because of inflation. To determine this, you can divide 70 by the present inflation rate.

4. 10,5,3 Strategy

This rule is a strategy in which one can estimate the average rate of return on investments. It suggests that 10 per cent returns are expected from long-term equity investments, 5 per cent from debt instruments, and 3 per cent from savings bank accounts.

5. 100 Minus Age

The 100 minus age rule is a helpful method for deciding asset allocation and determining the proportion of equity and debt investments. By subtracting an individual's age from 100, it provides a percentage of 75 per cent for equity and 25 per cent for debt.

Compiled by Syed Muskan

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