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Understanding the financial rules of thumb

Updated: Wednesday, 14 Nov 2012, 5:08 PM EST
Published : Wednesday, 14 Nov 2012, 5:08 PM EST

Seth Stutman

LONGMEADOW, Mass. (Mass Appeal) - When it comes to financial planning it's always good to know some handy rules to help you out along the way.

Dylan Bond, owner of Bond Financial Services , discusses ways to double your money by calculating interest rates.

Bond Financial Services
171 Dwight Rd, Longmeadow, MA 01106
info@bondfinancialservices.com
(413) 754-4747

For more information, visit BondFinancialServices.net.

Rule of 72:
Interest rate is 7.2%
72/7.2 = 10 years
Interest Rate is 1%
72/1 = 72 years

Rule of 100:
If your 65 years old
100 – 65 = 35
At age 65 a good rule of thumb is to expose no more than 35% of your portfolio to risk

Gross up calculation:
Need $2,500.00 after taxes
Tax Rate is 20%
Then you’ll need to take out (2500x100)/(100-20) or 250,000 / 80 = $3125.00

You should always consult with a tax consultant prior to making any tax related decisions.