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Showing posts from February, 2021

Best investment Rule : 50/30/20 Rule

  The 50/30/20 rule is a guideline for budget allocation to plan your spending to prepare you for the future and unforeseen circumstances. Your budget can be categorized into three simple buckets: Your necessities (50%) Your wants (30%) Your savings & investments (20%) Your Necessities 50% of your income goes to your needs. Your necessities are expenses which are important and canā€™t be avoided. Examples are housing, food, transportation, medication, utility bills. Whatever that you need to survive should be parked under this category.   Your Wants 30% of your income goes to your wants. Differentiating between necessities and wants isnā€™t always easy. Simply put, your wants are basically anything that you can live without. They can be the money you allocate for shopping, dining out, hobbies, gym subscription, or anything ā€œextraā€ that is not essential to living. Hint: Your wants typically involve something that you do for fun. Your Savings & Investments The balance of 20%...