Investment: How much of your savings should you invest in equities and how much in safer investments? know...

The biggest challenge in the world of investing is deciding where to invest and how much risk to take. Ordinary investors, in particular, are often confused about whether to invest more in the stock market or choose safer options. To simplify this dilemma, experts have suggested a very simple formula, known as the "100 minus your age" rule.

This rule teaches you how to balance your investments according to your age, avoiding both excessive risk and excessive caution. This is why financial experts consider it the golden rule of investing. If you also want to build wealth in the long term, this rule can be very useful for you.

What is the "100 minus your age" rule?

This is a simple investment formula that tells you how much of your total savings should be invested in the stock market (equity) and how much in safer options, based on your age.

Formula: 100 – Your Age = Percentage of investment in Equity

Let's understand with an example:
If your age is 30 years

100 – 30 = 70% investment in Equity
The remaining 30% in safe options
If your age is 50 years

100 – 50 = 50% in Equity
50% in options like FD, debt funds, PPF
Why do experts call it the "Golden Rule"?
Financial experts believe that this rule offers three major benefits:

1. Risk control with age - As age increases, the capacity to take risks decreases. This rule automatically reduces risk.

2. Long-term wealth creation - Investing more in equity at a younger age allows you to take full advantage of compounding.

3. Balanced portfolio - This rule teaches you to invest based on logic, not emotions.

Where can you invest?
Equity Options
Mutual Funds (Equity)
SIP
Direct Stocks
Index Funds

Safe Investment Options
Fixed Deposit
Debt Mutual Funds
PPF
Government Bonds
Is this rule right for everyone? These are guidelines, not strict laws. If your income is stable and you can afford to take risks, you can even follow the 110 or 120 minus rule. However, for new investors, the 100 minus rule is considered the safest starting point.

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