These MONEY rules will keep you Financially SECURE! | Ankur Warikoo Hindi

warikoo

17 Feb 202410:26

Summary

TLDRThis video script outlines various financial rules for Indians to follow when making significant purchases such as cars, phones, groceries, and planning for investments, education loans, emergency funds, personal loans, retirement, and vacations. It emphasizes the importance of budgeting and financial planning with rules like 35-15 for car loans, 26-10 for phone purchases, 10-5-3 for grocery spending, the 100-x rule for investments, 51-10 for education loans, 3-6-9 for emergency funds, 51-25 for personal loans, 20-160 for retirement planning, and 25-3 for domestic vacations, ensuring viewers can make informed decisions and avoid financial pitfalls.

Takeaways

🚗 Car Purchase Rule: In India, for any car purchase, a down payment of at least 30% of the on-road price is required, with a maximum loan tenure of 5 years and an EMI that should not exceed 15% of your monthly salary.
📱 Phone Purchase Rule: The cost of a phone should not exceed twice your monthly income, and if you take an EMI, it should be zero-cost and not exceed 6 months, with the EMI not exceeding 10% of your monthly salary.
🛒 Grocery Purchase Rule: Allocate approximately 10% of your total monthly income for groceries, adjusting this percentage based on the number of family members.
💰 100 - X Rule for Investment: Invest at least X% of your total income in safe instruments, where X is your age, and consider a mix of fixed deposits, mutual funds, and other predictable income streams.
🎓 Education Loan Rule: The cost of an education loan should not exceed five times the annual fees, including living expenses, and the EMI should not be more than 15% of your expected future income from the course.
💡 Emergency Fund Rule: Maintain an emergency fund equivalent to at least 3 to 9 months of necessary expenses, depending on your employment stability and job risk.
🏠 Personal Loan Rule: Personal loans should be considered carefully and only taken for significant needs, with the interest rate not exceeding 15% and total debt not exceeding 25% of your total income.
👴 Retirement Planning Rule: Save at least 20% of your annual income towards retirement and aim for a retirement corpus that is at least 10 times your total annual income.
🏡 Domestic Vacation Rule: The cost of a domestic vacation should not exceed twice your monthly salary, and you should save and invest at least 5% of your annual income towards vacations.
🌍 International Vacation Rule: The cost of an international vacation should not exceed five times your monthly income, and you should save towards such vacations, taking one per year if possible.
🏍 Two-Wheeler Purchase Rule: For purchasing a two-wheeler, a down payment of at least 20% of the on-road price is recommended, with a maximum loan tenure of 3 years and an EMI not exceeding 10% of your monthly income.

Q & A

What is the minimum down payment required for buying a car in India according to the script?
-The minimum down payment required for buying a car in India is at least 30% of the on-road price of the car.
What is the maximum loan tenure for purchasing a car in India as mentioned in the script?
-The maximum loan tenure for purchasing a car in India is up to 5 years.
What should be the EMI of a car loan in relation to one's monthly salary as per the script?
-The EMI for a car loan should ideally be within 15% of one's monthly salary.
What is the rule for buying a phone in India in terms of its cost relative to the buyer's monthly income?
-The cost of the phone should not exceed two times the buyer's monthly income.
What is the zero-interest EMI tenure for buying a phone in India as per the script?
-The zero-interest EMI tenure for buying a phone in India should not exceed 6 months.
How much of one's monthly salary should the EMI for a phone not exceed according to the script?
-The EMI for a phone should not exceed 10% of one's monthly salary.
What is the rule for grocery shopping in India in terms of monthly income percentage?
-For grocery shopping in India, one should spend approximately 10% of their single or total monthly income.
What is the 100-x rule for investment as mentioned in the script?
-The 100-x rule for investment suggests that one should invest x% of their total income in safe instruments, where x is the individual's age.
What is the maximum EMI for an education loan in relation to one's future income from the course?
-The maximum EMI for an education loan should not exceed 15% of one's future income from the course.
According to the script, what should be the minimum emergency fund for a salaried individual in India?
-A salaried individual in India should have a minimum emergency fund equivalent to 3 months of their monthly expenses.
What is the 3:69 rule for emergency funds according to the script?
-The 3:69 rule for emergency funds suggests that the emergency fund should cover at least 3 months of expenses for a stable salary earner and up to 6 months for self-employed or freelancers.
What is the maximum interest rate for a personal loan in India as per the script?
-The maximum interest rate for a personal loan in India should not exceed 15%.
What is the 20-160 rule for retirement planning in India according to the script?
-The 20-160 rule for retirement planning in India suggests that one should save at least 20% of their annual income towards retirement and the total retirement corpus should be at least 10 times their annual income.
What is the maximum cost of a domestic vacation in India in relation to one's monthly salary as per the script?
-The maximum cost of a domestic vacation in India should not exceed twice the individual's monthly salary.
What is the 6:51 rule for international vacations in India according to the script?
-The 6:51 rule for international vacations in India suggests that the cost of the vacation should not exceed six times the individual's monthly income.
What is the minimum down payment required for buying a two-wheeler in India as per the script?
-The minimum down payment required for buying a two-wheeler in India is at least 20% of the on-road price.
What are the three conditions for buying a two-wheeler in India according to the script?
-The three conditions for buying a two-wheeler in India are: a minimum down payment of 20%, a maximum loan tenure of 3 years, and the EMI should not exceed 10% of one's monthly income.

Outlines

00:00

🚗 Car and Phone Purchase Rules in India

The first paragraph discusses financial rules for purchasing a car and phone in India. For a car, the '35-15 rule' suggests that the on-road price should be at least 30 times the down payment, with a maximum loan tenure of 5 years and the EMI not exceeding 15% of the monthly salary. For a phone, the '2-6-10 rule' states that the cost should not exceed two times the monthly income, with a zero-cost EMI option available for up to 6 months, not exceeding 10% of the monthly salary. These rules aim to guide responsible financial decisions for such purchases.

05:03

🛒 Grocery and Investment Guidelines

The second paragraph covers rules for grocery shopping and investment planning. The '10-55-20' rule for groceries advises spending approximately 10% of one's monthly income, with adjustments for family members. The '100-x rule' for investments suggests investing a portion of one's total income in safe instruments, with the remainder in equities for long-term predictable returns. The paragraph also touches on education loans, emphasizing affordability based on future income and the importance of emergency funds for various scenarios.

10:06

🏠 Retirement and Vacation Planning Rules

The third paragraph focuses on retirement planning and vacation rules. The '20-160 rule' for retirement suggests saving at least 20% of one's annual income towards retirement, with a target corpus 10 times the annual income. For vacations, the '2-3 rule' advises that the cost of domestic vacations should not exceed twice the monthly salary, with a savings and investment strategy for such expenses. The '6-5-1 rule' for international vacations sets a limit of five times the monthly income, with a savings component for a single such trip per year. The paragraph concludes with a personal anecdote about the author's book, 'Make Epic Money,' which aims to educate readers on various aspects of personal finance.

Mindmap

Keywords

💡Down Payment

Down payment refers to the initial amount of money paid by a buyer to the seller to secure a purchase, often in the context of buying a car or a house. In the video's theme, it is mentioned as a minimum of 30% of the on-road price for a car purchase, illustrating the financial commitment required at the start of such a transaction.

💡EMI (Equated Monthly Installment)

EMI stands for Equated Monthly Installment, which is a fixed amount paid by a borrower to a lender at fixed intervals. The video discusses the maximum duration of a car loan being 5 years and the EMI being capped at 15 times the monthly salary, emphasizing the importance of manageable monthly payments.

💡On-Road Price

The on-road price is the final price paid by a customer for a vehicle, including all additional costs such as taxes, insurance, and registration fees. The script mentions that the down payment should be at least 30% of the on-road price, indicating the total cost of the vehicle after all charges are added.

💡Monthly Income

Monthly income is the amount of money earned or received regularly, typically on a monthly basis. The video uses the term to calculate the affordability of various purchases, such as phones and groceries, in relation to one's monthly earnings.

💡Grocery

Grocery refers to food and other household supplies purchased regularly from a store. The script discusses the rule of thumb for spending on groceries, which should be around 10% of one's monthly income, to maintain a balanced budget.

💡Investment

Investment in the video refers to the act of allocating resources, such as money, with the expectation of generating income or profit. The 100 - x rule mentioned in the script suggests investing a portion of one's total income based on their age, indicating a strategy for financial planning.

💡Education Loan

An education loan is a financial aid provided to students to pursue higher education. The script outlines the 51:10 rule for education loans, where the loan amount should not exceed five times the annual fee of the course, including living expenses, and should not exceed 15% of the expected future income.

💡Emergency Fund

An emergency fund is a reserve of cash set aside to cover unexpected expenses or financial emergencies. The script's 3:69 rule for India suggests having at least three months' worth of necessary expenses saved, emphasizing the importance of financial preparedness.

💡Personal Loan

A personal loan is an unsecured loan that can be used for various personal expenses. The script's 51:25 rule for personal loans in India indicates that the total debt repayment, including interest, should not exceed 25% of one's total income, highlighting the need for responsible borrowing.

💡Retirement Planning

Retirement planning is the process of preparing for the financial needs of retirement. The script's 20160 rule for India suggests saving at least 20% of one's annual income towards retirement and having a retirement corpus that is at least ten times the annual income, illustrating a long-term financial strategy.

💡Vacation

A vacation is a period of leisure or travel away from one's regular occupation or duties. The script discusses the cost of domestic and international vacations in relation to one's monthly income, suggesting that the cost should not exceed certain multiples of the monthly salary to ensure affordability.

💡Two-Wheeler

A two-wheeler refers to a vehicle with two wheels, such as a motorcycle or scooter. The script's 23:10 rule for India suggests that the down payment for a two-wheeler should be at least 20% of the on-road price, with a maximum loan period of 3 years and an EMI capped at 10% of the monthly income.

Highlights

India's rule of 35-15 for car purchases: A minimum 30% down payment is required based on the on-road price of the car.

Car loan tenure should not exceed 5 years, and the EMI should not exceed 15% of the monthly salary.

India's rule of 26-10 for phone purchases: The cost of the phone should not exceed twice the monthly income.

EMI for phone purchases should be zero-cost and not exceed 6 months, with the EMI not exceeding 10% of the monthly salary.

Grocery shopping rule of 10-53 in India: Allocate approximately 10% of the total monthly income for groceries for a single person.

For families, add 5% for each additional family member up to 20% of the total family income for groceries.

The 100-x rule for investments: Invest in safe instruments equal to your age in years.

Safe investment instruments include FDs, PPFs, and mutual funds for predictable income streams.

Education loan rule of 5-1-10 in India: The loan amount should not exceed five times the annual fee, including living expenses.

EMI for education loans should not exceed 15% of the expected future income after the course.

India's 3-6-9 rule for emergency funds: Have at least 3 months of expenses saved for emergency funds if employed.

Self-employed individuals should have 6 months of expenses saved, and those in high-risk jobs should have 9 months.

Personal loan rule of 5-25 in India: The interest on personal loans should not exceed 15%, and total debt should not exceed 25% of total income.

Retirement planning rule of 20-160 for India: Save at least 20% of annual income towards retirement.

The retirement corpus target should be at least 10 times the annual income, considering a zero-income scenario post-retirement.

Domestic vacation rule of 2-5-3 for India: The cost of the vacation should not exceed twice the monthly salary.

Save and invest at least 5% of the annual income towards vacations and limit to three domestic vacations per year.

International vacation rule of 6-5-1 for India: The cost of the vacation should not exceed six times the monthly income.

Save 5% of the annual income towards international vacations and limit to one such vacation per year.

Two-wheeler purchase rule of 2-3-10 for India: A minimum 20% down payment is required, with a maximum 3-year loan term.

The EMI for the two-wheeler loan should not exceed 10% of the monthly salary.

The provided rules are guiding principles, not strict boundaries, and should be adapted based on individual financial strategies.