100 Minus Rule: Investment is a cycle that every individual does at some point in his life and should do too. But, where to invest money, how to invest, how much to invest? Everyone should understand these questions and design their portfolio accordingly. Especially investing in a period of recession can be very risky. But, this is the time when you have to make a heroic entry and run your investment cycle. How will this happen? There is a miraculous formula for this, which will always keep you in profit and will help you in creating a big bank balance. For this, you will have to understand mathematics.

100 Minus Rule: What to do?

The Rule of 100 Minus is an easy and effective formula that guides you in the right asset allocation. According to this rule, you have to subtract your age from 100. Whatever result comes, it will be a part of the investment in equity i.e. stocks in your portfolio. It is advisable to invest the rest in debt or fixed-income instruments.

100 Minus Rule: How does this formula work?

Suppose, you are 30 years old.

100 - 30 = 70

According to this formula, you should invest 70% of your portfolio in equity (Stocks, Mutual Funds) and the remaining 30% in debt instruments (FD, Bonds, PPF).

100 Minus Rule: Why is this formula the most special?

1. Reduces risk

Your portfolio remains balanced as you age. As you grow older, the risk reduces.

2. Long term growth

Investing more in equities at a young age helps your capital grow faster.

3. Safety net

Investing more in debt instruments closer to retirement gives you stability.

Understand how the portfolio will look from the calculation.

Case 1

If you are 25 years old

Equity investment: 100-25= 75%

Debt investment: 25%

Your portfolio will look like this: ₹1,00,000 investment= ₹75,000 (equity) + ₹25,000 (debt)

Case 2

- If you are 50 years old

Equity investment: 100-50= 50%

Debt investment: 50%

Your portfolio will look like this: ₹1,00,000 investment= ₹50,000 (equity) + ₹50,000 (debt)

Case 3

If you are 60 years old

Equity investment: 100-60= 40%

Debt investment: 60%

Your portfolio will look like this: ₹1,00,000 investment = ₹40,000 (equity) + ₹60,000 (debt)

Is the 100 Minus Rule suitable for everyone?

This rule is a basic guide for every investor. However, it can change depending on your financial needs, goals and risk-taking ability.

1. For the youth

- This rule gives an opportunity to take risks and grow money rapidly.

2. Near retirement

- According to the rule, investing more in debt instruments will give you stability.

3. Customization

- If you can take more risk, then the equity portion should be kept large.

Experts also use it

The 100 Minus Rule is a simple but effective asset allocation tool. It helps you to make the right investment plan according to your age. But every investor should customize it according to his needs and goals. The 100 minus rule helps you invest in the right direction. If you follow it correctly, then in 2025 your portfolio will not only be safe but also full of profits. So what are you waiting for? Balance your portfolio and move ahead on the path of profits.