MONEY RULES CHEAT SHEET Simple Rules to Guide Smart Financial Decisions

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Olori Uwem

Well-Known Member
Mar 18, 2024
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MONEY RULES CHEAT SHEET

Simple Rules to Guide Smart Financial Decisions

Want to make money moves with confidence? Here are timeless personal finance rules that simplify the numbers and help you plan with clarity:


1. Rule of 72 – How Fast Will Your Investment Double?

Formula: 72 ÷ Your Annual Return (%) = Years to Double Your Investment
Example: Earning 10% annually?
72 ÷ 10 = ~7 years for your money to double.


2. Rule of 2000 – Estimate Your Annual Salary

Formula: Hourly Wage × 2000 = Estimated Annual Income
Example: $20/hour × 2000 = $40,000/year


3. Rule of 25x – How Much Do You Need to Retire?

Formula: Annual Expenses × 25 = Retirement Fund Goal
Example: Spend $60,000/year?
60k × 25 = $1.5 million needed to retire comfortably.


4. Rule of 3x – Smart Home Buying Limit

Formula: Mortgage ≤ 3 × Your Annual Income
Example: Income is $100k/year?
Your home loan should be ≤ $300,000


5. Rule of 20/4/10 – Car Buying Made Simple

Formula:

• 20% Down Payment
• 4-Year Loan Term (or less)
• Monthly car costs ≤ 10% of income

Example: Buying a $20,000 car?
• Down Payment = $4,000
• Loan ≤ 4 years
• Monthly cost ≤ 10% of your income


️ 6. Rule of 10x – Term Life Insurance Coverage

Formula: Coverage = 10 × Your Annual Income
Example: Earn $100k/year?
You should aim for a $1 million term life policy.


✅ Final Thought:

These financial rules are not rigid laws, but time-tested guidelines to help you make smarter, faster, and more confident money decisions. Save them, share them, live by them.