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Viral X post shares 9 key personal finance rules like Rule of 72, Rule of 70, 4.1 percent withdrawal, 6x emergency fund, and 20x life insurance for financial security.
Finance Expert’s Viral Thread Lists 9 Must-Know Rules for Wealth & Security
An investing and market expert’s X post suggesting 9 rules that we all must know has gone viral, bringing a lot of attention and debate on the matter. AK Mandhan, investing finance expert, in his X thread shared 9 personal finance rules with explanation, including rule of 72, rule of 70, 4.1% withdrawal rule, 6x emergency rule, life insurance rule 20x and more.
These rules will help you measure your current finances and adjust them accordingly, so you won’t lag too far. Financial security is a key cornerstone in an individual’s life, protecting against untoward incidents like medical emergencies and giving peace of mind.
1 ) Rule of 72 in finance
No. of yrs required to double your money at a given rate, you just divide 72 by interest rate
E.g., if you want to know how long it will take to double your money at 8% interest, divide 72 by 8 and you will get 9 years.
At 6% rate, it will take 12 years.
At 9% rate, it will take 8 years.
2) Rule of 70 for inflation
Divide 70 by current inflation rate to know how fast the value of your investment will get reduced to half its present value.
Inflation rate of 7% will reduce the value of your money to half in 10 years.
3) 4.1% Rule for Financial Freedom
To achieve financial independence, build a corpus equal to 25 times your annual expenses. For example, if yearly expenses are Rs 5 lakh, the required corpus is Rs 1.25 crore. Invest half in equity and half in fixed income, and withdraw 4% annually.
4) 100 minus your age rule
This rule is used for asset allocation.
Subtract your age from 100 to find out, how much of your portfolio should be allocated to equities
Age is 30 so (100 – 30 = 70)
Equity : 70%
Debt : 30%
Age is 60 so (100 – 60 = 40)
Equity : 40%
Debt : 60%
5) 10-5-3 Rule
One should have reasonable returns expectations
10℅ Rate of return – Equity / Mutual Funds
5℅ – Debts ( Fixed Deposits or Other Debt instruments)
3℅ – Savings Account
6) 50-30-20 Rule – about allocation of income to expense
Divide your income into
50℅ – Needs (Groceries, rent, emi, etc)
30℅ – Wants (Entertainment, vacations, etc)
20℅ – Savings (Equity, MFs, Debt, FD, etc)
At least try to save 20℅ of your income.
7) 3X Emergency Rule
Always put at least 3 times your monthly income in Emergency funds for emergencies such as Loss of employment, medical emergency, etc.
3 X Monthly Income
In fact, one can have around 6 X Monthly Income in liquid or near liquid assets to be on a safer side
8) 40℅ EMI Rule
Never go beyond 40℅ of your income into EMIs.
Say you earn, 50,000 per month. So you should not have EMIs more than 20,000 .
This Rule is generally used by Finance companies to provide loans.
You can use it to manage your finances.
9) Life Insurance Rule
Always have Sum Assured as 20 times of your Annual Income
20 X Annual Income
Say you earn 5 Lacs annually, U should atleast have 1 crore insurance by following this Rule.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
September 07, 2025, 09:04 IST
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