Golden rules of money: Expert breaks down 72, 4, 10×, 3× theories for managing money matters

Most people think wealth-building is complicated. The jargon, the charts, the endless debates on where to invest—it can feel overwhelming. No surprise, then, that many give up before they even start. But according to CA Abhishek Walia, money management doesn’t need to be intimidating. If you remember just four numbers—72, 4, 10×, and 3×—you’re already ahead of most.

Walia explains that these numbers form the backbone of personal finance. They represent the Rule of 72, the 4% Withdrawal Rule, the 10× Life Insurance Rule, and the 3× Emergency Fund Rule. Together, they provide a simple yet powerful framework for managing money, building wealth, and staying financially secure.

Rule of 72

The Rule of 72 is perhaps the most elegant way to understand compounding. Just divide 72 by your annual rate of return, and you’ll know how long it will take your money to double. At 12%, your money doubles in six years. At 8%, it takes nine years. Even a 2% difference can shave years off your timeline. Most accurate for returns between 6–12%, this rule helps salaried professionals and investors visualize their long-term growth.

4% Withdrawal Rule

Next is the 4% Rule, a cornerstone of retirement planning. To retire comfortably, aim for a corpus worth 25× your annual expenses, then withdraw 4% a year, adjusting for inflation. For example, if you need ₹4 lakh annually, your retirement fund should be at least ₹1 crore. Each year, withdrawals rise in line with inflation, ensuring you maintain your lifestyle. While based on historical market data, Walia cautions that it works best as a guideline, not a guarantee.

50-30-20 and 100 Minus Age

Beyond the “big four,” simple rules make day-to-day money management easier. The 50-30-20 Rule divides after-tax income into 50% for needs, 30% for wants, and 20% for savings or debt repayment—helping you strike a balance between living well and planning ahead. Similarly, the 100 Minus Age Rule offers a quick guide to asset allocation: subtract your age from 100 to determine the percentage of your portfolio that should be in equities.

40% EMI Rule

Debt can derail even the best plans, which is where the 40% EMI Rule comes in. Your loan EMIs should never exceed 40% of monthly income. For someone earning ₹1 lakh, that means capping EMIs at ₹40,000. This keeps debt manageable and prevents lifestyle compromises.

10× Life Cover and 3× Emergency Fund

Protection is just as critical as growth. The 10× Life Insurance Rule suggests multiplying your annual income by 10 to determine minimum coverage. So, an income of ₹10 lakh requires ₹1 crore in insurance. For added safety, some experts suggest 15×. Then comes the 3× Emergency Fund Rule—keeping at least three months of income aside for sudden shocks like job loss, illness, or repairs. Ideally, six months’ worth is safer.

Simple rules, big impact

“These rules aren’t rocket science,” Walia emphasizes. “They’re easy, practical, and proven. More importantly, they anchor your decisions when market noise or financial FOMO tries to distract you.”

Still, he warns that knowing the rules isn’t enough—you need to apply them consistently. Are your investments aligned with your goals? Do you have enough reserves? Are you balancing risk with age and returns with discipline?

In the end, financial success isn’t about chasing complicated strategies. It’s about following simple, timeless rules—and sticking to them.