Rules to make good investment | Fusion - WeRIndia

Normally, most people invest their money and see if they are yielding a good return or if they provide good interest.

But, financial experts say that there are certain rules to be followed for investments to check whether they are actually yielding a good return or not.

Here is a list of some investment rules:

Evaluate the future value of the investment considering the inflation factor as the money today will not be equal to the same in the future.

The rule of 72 means you have to divide 72 with the annual interest rate. It tells you the number of years in which your money will be doubled. For example, if you are investing ₹2,000 at the rate of 8 percent, then divide 72 by 8 which is equal to 9. It means your money will be doubled i.e. becomes ₹4,000, in 9 years.

The rule of 114 reveals the number of years in which your money will be tripled on compounding. For this, you have to divide 114 with the annual interest rate just as for the rule of 72.

The rule of 144 is also similar to the above rules. It tells you the number of years in which the money will be quadrupled on compounding. Just divide 144 with the annual interest rate to know the number of years it will take to be quadrupled.

The rule of 100 minus your age reveals what percentage of amount should be invested in equities. For example, if you are 30 years old and when you subtract 30 from 100 it becomes 70. That means you can invest 70 percent of your money in equities, and the rest in safe investments. As your age increases, the percentage to be invested in equities will be reduced.

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