1. If you’re 40 and make Rs 20 Lakh a year, you should have a net worth equal to Rs80 lakh, assuming you have no inheritance.
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8. What should be your Networth ?
8.1. How to calculate your Net worth ?
8.1.1. Networth is your assets minus your liabilities, and your assets, include not only your cash, investments and home equity, but also tangible property such as jewellery and furniture.
8.2. Should equal your age multiplied by your pre- tax income, divided by 10. That number, minus any money that you inherit, should be your net worth for your age and income.
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10. The
11. #6
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11.2. How and where should you invest
11.2.1. A.Investments option are :
11.2.1.1. Equities ( Stock Market)
11.2.1.1.1. How much to invest in Equities?
11.2.1.2. Mutualfunds
11.2.1.3. E.L.S.S
11.2.1.4. Exchange Traded Funds
11.2.1.5. Gold & e-Gold
11.2.1.6. Real Estate ( Commercial Property, Always, that gives you returns)
11.2.1.7. Fixed Deposits
11.2.1.8. Others
11.2.2. B. Do you want to know # of years it takes to double your investments .
11.2.2.1. The Rule is so Simple
11.2.2.1.1. Rule of 72 : Number of years to double = 72 / expected return.
11.2.2.1.2. Rule of 144 :- Numbers of years to quadruple= 144/expected return.
11.2.2.1.3. Rule of 114: Number of years to triple = 114/ expected return.
12. #5
12.1. Quantum of your retirement Fund
12.1.1. This is a rule to know Minimum fund required .
12.1.1.1. 10-20 times your annual income
12.1.1.2. It’s a ball park generally accepted method.
12.1.1.3. 25 times your annual spend is also recommended.
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15. Instead of buying Car We can set aside Funds for Ola/Uber, which will save us from EMI’s Frequent Car repairs, Car Insurance, Car cleaning Expenses.
16. 5% of your income to Charitable Donations
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27. 4
27.1. How much Life insurance ?
27.1.1. 10 times of your annual income
27.1.1.1. Go in for term Insurance
27.1.1.1.1. Advantages - Highest cover, Lowest premium. Pure Insurance, Don’t look for Returns while you are alive
27.1.1.1.2. This is cover your dependants, not as a return for you.
28. 3
28.1. Min 3- 6 months of household expenses must be kept aside as Emergency Fund. ( Necessary expenses, including EMIs, Bills, Children fees, Groceries etc)y
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28.1.2. Must Invest in Liquid Mutual Funds instead of FD
28.1.3. Advantage- Mutualfunds are less costlier, more flexible, and if kept invested for 1 year, its tax free ( Subject to IT Act rules)
28.2. Emergency Fund rule
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29. EMI Rules
29.1. All EMI’s together cannot > 50% of your Net take home every month.
29.1.1. Housing loan, try to keep it MAX @ 25%
29.1.2. Car EMI ( if you decide to) Max 10%
29.1.2.1. 20/4/10 rule
29.1.2.1.1. Tenure has to be max 4 years
29.1.2.1.2. Max EMI has to be 10 % of net take home.
29.1.2.1.3. 20 % of the car value must be paid as down payment by you. Minimum, which means, max funding you should go in for is 80%
29.1.3. Education Loan, Personal loan & any other type of loan cannot exceed 15 %
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30. 10 % of your income on Self Education, Coaching, Mentoring, Books, Course’s.
31. 10% of your income to Spoiling yourself and your Family/ Leisurely expenses,Luxury
31.1. Going to Spa, Holiday, Family outing weekly going to Chill out, watching movies, lunch, dinner, partying, Liquor
31.1.1. Buying Gadgets, Mobile phones, I pads, Shopping, Birthday parties, Anniversary Parties, Buying gifts for socials
32. 55% Home Necessities
32.1. Housing (EMI’s/Rent), Groceries, Electricity, Daily expenses, Medicines etc
33. 20% Savings ( Goals/Objectives)
33.1. 10% Financial Freedom ( This is the most important Goals which will help you to be free from the activity you don’t like to do for earning money,
33.1.1. Stocks, Mutual Funds, Passive Income Vehicles, Real estate Investing, Any other Investments.
33.1.2. Or Clear off your Credit Cards dues, not Minimum Payments, But actual payments in Full
33.1.2.1. And then Invest towards other life goals, Doesn’t make sense to invest while you have credit cards debts.