THE 7 GOLDEN

FINANCE RULES FROM

MY 3 YEAR STUDY

It took me 3 years to get to know them, but I'll teach you in 7 minutes

ASTONE NGAEJE FPWM® ,FMVA® & BIDA™

Auditor and FP&A Enthusiast
Financial Planning & Wealth Management Certified
Financial modeling and Valuation Analyst Certified
Business Intelligence and Data analyst Certified
 Astone Ngaeje

Managing your finances can be

challenging, but understanding
and implementing tried and
true finance principles can
help you achieve your financial
goals.

In this article, we will discuss

seven finance principles that
can help you make informed
decisions and achieve financial
success.
 Astone Ngaeje

1. 50/30/20 RULE
The 50/30/20 rule is a budgeting
principle that suggests you allocate
50% of your income towards essential
expenses, such as housing, utilities,
transportation, and groceries.

The remaining 50% should be divided

between discretionary spending (30%)
and savings (20%).

This rule helps to balance your

spending while ensuring that you set
aside enough money for savings and
emergencies.
 Astone Ngaeje

2. 300 RULE
The 300 rule is a guideline for
purchasing large-ticket items such as
electronics or appliances.

The rule suggests that you take the

cost of the item and divide it by 300.
The resulting number is the number of
days that you should wait before
making the purchase.

This rule helps to prevent impulse

purchases and ensures that you have
enough time to consider your decision.
 Astone Ngaeje

3. HOME 3x RULE
The Home 3x Rule is a guideline for
purchasing a home.

The rule suggests that your home

purchase should not exceed three
times your annual income. For
example, if you make $1,000,000 per
year, the suggested maximum purchase
price for a home would be $3,000,000.

This rule helps to ensure that you can

comfortably afford your home without
stretching your budget.
 Astone Ngaeje

4. RULE OF 72
The Rule of 72 is a quick and easy way
to estimate how long it will take for
your money to double at a given
interest rate.

To use the Rule of 72, divide the

interest rate by 72. The resulting
number is the number of years it will
take for your money to double.

This rule can help you make informed

decisions about investments and
retirement planning.
 Astone Ngaeje

5. 20/4/10 RULE
The 20/4/10 rule is a guideline for
purchasing a car.

- Make a down payment of at least 20% of

the total purchase price.

- Opt for a loan term that does not exceed

four years (48 months)

- Ensure that your monthly loan payments,

including principal and interest, do not
exceed 10% of your gross monthly
income.

This rule helps to ensure that you can afford

your car without stretching your budget.
 Astone Ngaeje

6. 3-6x EMERGENCY FUND RULE

The 3-6x Emergency Fund Rule
suggests that you should aim to have
three to six months' worth of living
expenses in an emergency fund.

The fund should be easily accessible

and used only for emergencies, such as
unexpected job loss, medical expenses,
or home repairs.

This rule can help you prepare for

unexpected events without having to
rely on credit cards or loans.
 Astone Ngaeje

7. 5x TO 6x RULE
The 5x to 6x Rule is a guideline for
retirement savings.

The rule suggests that you should aim

to have five to six times your annual
income saved for retirement by age 50.
By age 67, you should aim to have 10
to 12 times your annual income saved
for retirement.

This rule can help you plan and save

for retirement and ensure that you
have enough money to live comfortably
in your golden years.
 Astone Ngaeje

In conclusion, implementing these

finance principles can help you make
informed decisions and achieve
financial success.

By following these principles, you can

balance your spending, make informed
purchases, prepare for emergencies,
and plan for retirement.

Remember, achieving financial success

takes time, effort, and discipline, but it
is achievable with the right mindset
and tools at your disposal.
 Astone Ngaeje

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My Name is Astone Ngaeje. I am
passionate about helping more people
become financially literate and Scaling
their business, Investment strategy and
personal finances.

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