Notes From Pranjal's Financial Freedom Masterclass

People usually don’t go broke in one dramatic moment. It’s not like Thanos snapping and half of your savings vanish. It happens slowly.

You’ve probably seen it around you, maybe your parents being convinced into some LIC plan because it “sounds safe,” or your grandparents proudly putting money in a scheme that barely grows. Or that cousin who was so sure that property prices would only go up, so he stretched his home loan to the max. Alone, none of these choices seems like a big deal. But when they all add up, it’s like earning more and working harder never really gets you ahead. And the crazy part is that you’re still cutting back on the things you actually want, while freedom feels just as far away.

No wonder so many Indians (literally 9 out of 10) say that they wish they’d started earlier. All because no one ever explained the basics in a way that seemed doable. That’s where these 11 simple rules come in to show you how money works IRL.

Let’s get to them, shall we?

1. The Rule of 72

This one’s a money hack so simple, you don’t even need a calculator.

Take the number 72 and divide it by the return rate of your investment. The answer tells you how many years it’ll take for your money to double.

For example:

• FD at 7% → doubles in ~10 years
• Savings account at 3% → 24 years (basically forever)
• Mutual fund at 12% → just 6 years

It becomes so easy to compare investments once you know this rule. 

Imagine someone bought a house 20 years ago for ₹10 lakh. Today, it's worth ₹1 crore. It sounds awesome, right? But if they had invested that same ₹10 lakh at 12%, it would've grown around ₹2 crore by now; it literally makes us rethink what “safe” really means.

It's not a complicated finance thing. It's just a simple way to check if your money is actually growing the way you think it is, or if you are just staring at the numbers that look good on paper to you.

2. The Rule of 70

If the Rule of 72 shows how fast money grows, the Rule of 70 is its evil twin, showing how fast money shrinks. In other words, it is inflation’s way of flexing its power.

The maths is simple:

For example:

• At 6% inflation → value halves in ~12 years
• ₹1 crore today will “feel” like ₹50 lakh in 12 years
• ₹1 lakh monthly expenses today → ~₹2 lakh in 12 years, ~₹4 lakh in 25 years

What this really shows is that inflation is like a silent weight, pulling us back while we are busy focusing on how to grow wealth; prices are slowly eating into it, which is why aiming for a round retirement goal like your “₹1 crore corpus” is misleading. It might sound big today, but without adjusting for inflation, it won't take us very far tomorrow.

3. The 6x Emergency Fund Rule

After inflation quietly eats into money, there is another thing we forget: emergencies, and unlike inflation, they don't build up slowly. They just show up out of nowhere. One hospital bill, a sudden job loss, or even a delayed client payment can wipe out months of savings before you even know it.

That's why the 6x rule exists. It basically says to keep aside a few months of expenses, so you're not scrambling when life throws any uncertainty.

Income Type	Emergency Fund Needed	Ex. (₹1 lakh monthly spend)
Salaried (fixed income)	6 months	₹6 lakh
Self-employed/variable	9 months	₹9 lakh

A few basics for you:

• Salaried: Park at least 6 months of expenses.
• Self-employed/freelancer: Make it 9 months.
• Where to keep it? Savings with auto-sweep, or liquid mutual funds for quick redemption.

Yes, the 5-6% returns may seem unappealing. But that’s not the point. The real return is peace of mind when life doesn’t go as planned.

4. The 20x Life Insurance Rule

Stop treating insurance as an investment plan. It's meant for your protection. The basic rule for this is that your cover should be around 20x your yearly income. 

So if you earn ₹10 lakh a year, go for about a ₹2 crore cover. That way, if something happens, your family doesn’t have to worry about money for a long time.
 
A few things to keep in mind:

• Always buy pure term insurance.
• Don’t extend it till age 90; usually, 65-75 is enough, because by then your kids or dependents won’t rely on your income.
• Never mix insurance with investments.

This is about keeping your family safe from sudden shocks, not about making returns.

5. The 25x Retirement Rule (30x for India)

When talking about retirement, you’ll often hear people say stuff like, “₹1 crore is enough.” But in reality, the number that matters depends on how much you spend.

Globally, the 25x rule is common. You save 25 times your yearly expenses, withdraw about 4% a year, and the money should last. But since inflation in India is higher, it’s safer to aim for 30x your annual expenses.

Example:

• Annual spend = ₹10 lakh
• Retirement fund target = ~₹3 crore

The goal is to have enough to meet your needs comfortably, year after year, without retirement turning into a source of worry.

6. The 40/30/30 Rule

There is this budgeting formula that is everywhere, the 50/30/20 rule. 

• You put half your money on needs, 
• 30% on wants, and 
• 20% on savings.

It sounds easy. But when you actually try applying it here in India, it doesn't always go well, with higher inflation, unpredictable expenses, and family responsibilities, that 20% savings often feels way too small.

That’s where the 40/30/30 split makes more sense:

Example:
If you earn ₹60,000/month

• ₹24,000 → needs
• ₹18,000 → savings
• ₹18,000 → wants

The big shift here is that savings get bumped to 30% and treated like a non-negotiable, just like rent or bills. If money feels tight, you trim your lifestyle first, not your future.

7. The 7-Day Rule

We all know that feeling when we see something online, then we add it to a cart, and for the next hour, our brain convinces us that it's a “need”, not a want. That's where the 7-day rule comes in.

It's simple: before buying anything that isn't essential, just wait for a week. If, after seven days, you still feel like you genuinely want it (and it fits your budget), go ahead, but honestly, most of the time excitement fades and you realise you didn't need it in the first place.

It can be a pause button for our wallet. It doesn't stop us from enjoying things we like, but it protects us from those “why did I even buy this?” moments that quietly eat into savings. 

8. The 100 Minus Age Rule

This rule is almost too simple, which is probably why most people brush it off. But it actually helps bring balance to how we invest.

The logic is straightforward:

The rest should sit in safer options like debt or fixed income. So, for example:

• At age 30 → 70% equity, 30% debt
• At age 50 → 50% equity, 50% debt

The idea is that when you’re younger, you’ve got time on your side. If markets go up and down, there’s room to recover. But as retirement gets closer, it makes sense to move money into safer ground because at that point, stability matters more than chasing returns.

It’s not some formula that’s the same for everyone, but it’s an easy starting point and a quick way to check if your portfolio is roughly in balance with your age.

9. The 20/4/10 Car Buying Rule

Buying a car always feels exciting. But the value drops the moment it leaves the showroom, but the loan stays with you for years. That’s why this simple 20/4/10 rule exists; it stops us from overspending on a depreciating asset.

Guidelines	What it means	Ex. (₹1 lakh monthly income)
20%	Minimum down payment	Pay 20% upfront on the car price
4 years	Max loan tenure	Don’t stretch EMIs beyond 4 years
10%	EMI cap	Monthly EMI ≤ ₹10,000

So, if you earn ₹1 lakh a month, your EMI shouldn’t cross ₹10,000.

It might feel strict, but it saves you from sinking too much into an asset that loses value every year. And if you pick a model just one segment below your “dream car,” you still get comfort and safety, without draining your future savings.

10. The 5/20/30/40 House Buying Rule

A house is probably the biggest financial decision for most of us. We just think in terms of “what EMI can I afford?” But there’s a cleaner way to check if the deal is actually in our range. That’s where the 5/20/30/40 framework comes in.

Guideline	Ideal Practice
Max Price	5× annual income
Loan Tenure	20 years max
EMI Cap	30% of monthly income
Down Payment	40% upfront

Example:
If your annual income is ₹20 lakh → ideal house price should stay within ₹1 crore.

And one tip most people ignore: under-construction projects feel cheaper at first, but they tie up your money and bring years of uncertainty. A ready-to-move home might cost a bit more, but it saves you from those headaches.

11. The 40% EMI Rule

Taking a loan is fine. Most of us do it at some point, whether it’s for a house, a car, or even smaller stuff. The problem comes when the EMIs start consuming too much of our income. A good limit is to keep all your EMIs together, whether it's home, car, personal loan, or credit card, you should keep them within 40% of what you earn each month, and on the safer side, keep it around 35%.

So if someone earns ₹1 lakh a month, their total EMIs shouldn’t cross ₹40,000.

Anything beyond that, and money starts to feel tight. It leaves little room for savings, emergencies, or even regular expenses without stress.

Lastly...

These 11 rules are really just everyday tools to make money decisions feel lighter. They give you a simple structure so you're never confused. Whether it’s setting aside for emergencies, building a retirement fund, or keeping EMIs under control, the idea is to create habits that keep you steady. 

And if you're ever stuck, we're right here! 😉