Remember these five formulas, including Rule 72, before making an investment: This will protect you from losing money and aid in wise planning

Start your investment adventure now if you intend to do so. If you start investing late, consider investment programmes that will help you make up for lost time

Before beginning the investment journey, two things should always be kept in mind. Time and return on investment are important considerations. Here we will discuss some of these 5 financial principles (rules) or formulae that will make things extremely obvious and simple for you.

1. The Rule of 70

By dividing 70 by the current inflation rate, you may calculate how quickly the value of your investment will be reduced to half. For example, if the current inflation rate is 5%, the value of your money will be cut in half in around 14 years. That is, if you want to keep the value of your Rs 100 at Rs 100, you must invest somewhere where you would receive a 5% yearly return. More information about negative returns can be found by clicking here.

2. 50-20-30 rule

This law is as unambiguous as its numbers. You must split your money into three equal portions. 50% of the salary must be preserved after taxes for living costs. For immediate necessities, 20% must be set aside, and 30% must be invested for future requirements.

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3. Rule of 72

This rule indicates how long it takes to double money. See the result of 72 divided by the prospective return or interest rate. If your SIP investment yields a 15% return, you may divide 72 by 15% to get how long it will take to double your money, which comes out to 4.8 years. In 4.8 years, your financial situation will have doubled.

4. The 114th Rule

This formula determines how long it will take to triple a quantity. By multiplying 114 by the anticipated interest rate, you can calculate this time. For instance, if your investment yields a 15% yearly return, divide 114 by 15% to get 7.6 years. In 7.6 years, your money will have tripled.

5. Age less 100

This has to do with the distribution of property. Your age is deducted from 100. Your recommended stock market investment % will be the number you receive. This guideline is founded on the idea that your risk tolerance increases as you get younger. Additionally, you will be able to make up for the losses you suffer throughout this time.