Financial Planning: The 10-5-3 Rule (2024)

FAQs

Financial Planning: The 10-5-3 Rule? ›

It suggests that 10% of your portfolio should be allocated to high-risk, high-reward investments, 5% to medium-risk investments, and 3% to low-risk investments. By following this rule, you can spread your investment risk across different asset classes and investment types, such as stocks, bonds, real estate, and cash.

The 10, 5, 3 rule. This is the expected long-term return from equities 10%, bonds 5%, and cash 3%.

The 10,5,3 rule

Though there are no guaranteed returns for mutual funds, as per this rule, one should expect 10 percent returns from long term equity investment, 5 percent returns from debt instruments. And 3 percent is the average rate of return that one usually gets from savings bank accounts.

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

Rule No.

1 is never lose money. Rule No. 2 is never forget Rule No. 1.” The Oracle of Omaha's advice stresses the importance of avoiding loss in your portfolio.

The 20/10 rule of thumb is a budgeting technique that can be an effective way to keep your debt under control. It says your total debt shouldn't equal more than 20% of your annual income, and that your monthly debt payments shouldn't be more than 10% of your monthly income.

The idea behind the 10:5 rule is that anytime you find yourself within 10 feet (3 meters) of someone, you should smile and make eye contact. When you are within 5 feet (1.5 meters) of someone, you should greet them with a friendly hello or other greeting.

Understanding the 10-3 Rule for ADHD: The Basics

The concept is simple: for every 10 minutes of focused work, your child takes a 3-minute break. This approach not only helps maintain their attention but also prevents burnout and frustration.

To find the least common multiple of 3, 5, and 10, we need to find the multiples of 3, 5, and 10 (multiples of 3 = 3, 6, 9, 12 . . . . 30 . . . . ; multiples of 5 = 5, 10, 15, 20, 30 . . . .; multiples of 10 = 10, 20, 30, 40 . . . .) and choose the smallest multiple that is exactly divisible by 3, 5, and 10, i.e., 30.

What are the 3 rules of financial planning? ›

Finance experts advise that individual finance planning should be guided by three principles: prioritizing, appraisal and restraint. Understanding these concepts is the key to putting your personal finances on track.

The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.

Determining your future needs in terms of investment, resources, funds. Determining the sources of funds. Managing or utilizing these funds efficiently.

Ready to talk to an expert? Are you approaching 30? How much money do you have saved? According to CNN Money, someone between the ages of 25 and 30, who makes around $40,000 a year, should have at least $4,000 saved.

The 80/20 budget is a simpler version of it. Using the 80/20 budgeting method, 80% of your income goes toward monthly expenses and spending, while the other 20% goes toward savings and investments.

In his free webinar last week, Market Briefs CEO Jaspreet Singh alerted me to a variation: the popular 75-15-10 rule. Singh called it leading your money. This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.

Once you have this amount in your emergency savings account, you can focus on growing it to your personal savings target while also tackling other goals. Those general saving targets are often called the “3-6-9 rule”: savings of 3, 6, or 9 months of take-home pay.

The 7/10 rule in investing is a straightforward method to calculate the fair value of a company's stock. The rule states that a company's stock price should either be seven times its earnings before interest, taxes, depreciation, and amortization (EBITDA) or 10 times its operating earnings per share.

Meaning of the 15-15-15 rule in Mutual Funds

The Investment: You should invest Rs 15,000 per month. The Tenure: The total of your investment should be 15 years. It means that you will invest Rs 15,000 every month for the next 15 years. The Return: Your expected returns on your investment should be 15%

To start, the 20/20/60 rule uses the same three categories as the above rule with some percentage adjustments: 20% for savings. 20% for consumer debt. 60% for living expenses.