The 100 Minus Age Rule
The ‘100 minus age’ rule, is a classic guideline on how to allocate money across equity and fixed income.
Investors must simply subtract their age from 100 to arrive at an approximate equity allocation, with fixed income accounting for the rest. This ensures investors have higher equities at a younger age and vice versa.
Young investors have age on their hands and are better placed to build wealth via equities, which is a long-term proposition as they have a higher risk appetite. As they get older, they get more risk averse and prefer stable and regular income.
100 – Your Age = Equity Allocation
- 30’s : 70% Equity (Equity MF’s, Alt Investments, Stocks.) 30% Debt (Debt MF’s, FD, Bonds etc)
- 50’s: 50% Equity (Equity MFs, Alt Investments, Stocks.) 50% Debt (Debt MF’s, FD, Bonds etc)
- 70’s: 30% Equity (Equity MFs, Alt Investments, Stocks.) 70% (Debt MF’s, FD, Bonds etc)
Mutual Fund are subject to Market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision.