· LIFE INSURANCE RULE
o You should have life insurance that is about 10 times your annual earning.
o However, your insurance needs will vary based on other factors such as your age, liabilities and debt.
· PAY YOURSELF FIRST RULE
o This rule says to first put away a little for your own retirement.
o 10% of your income should go into this right from your first salary.
o It is important to increase the amount as your income rises over the years.
o Investment of an amount X per month in an 8.5% annual growth plan, with an increase in investment by 10% annually, will become 5000 times of X after 30 years.
· RETIREMENT CORPUS RULE
o This rule says that after retirement, you will require 20 times your annual income to replace nearly 80% of the pre-retirement income.