Episode 008: Mastering Money with Financial Rules of Thumb

A financial heuristic is a mental shortcut you use to make financial decisions quickly and easily. These are also known as financial rules of thumb, and can guide your financial choices without requiring extensive analysis and avoiding information overload. In this episode of The Finance Geeks, we're putting these financial rules of thumb under the microscope.

We'll explore popular rules like the 50/30/20 Rule (50% Needs, 30% wants, 20% invest), the Rule of 72 (calculating investment doubling time), the 100-minus-your-age asset allocation strategy and the Pareto Principle (80/20 Rule), plus many more, revealing their strengths and limitations.

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Chapters:

0:00 - Intro

8:33 - Hot Off The Press

18:40 - The Focal Point: Financial Rules of Thumb

44:07 - Two Pennies Worth

49:56 - Quotes & Anecdotes

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Podcast Reference Links:

Everything you need to know about St George

https://www.english-heritage.org.uk/visit/inspire-me/everything-you-need-to-know-about-st-george-and-the-farleigh-hungerford-mural/

9 things you didn't know about St George

https://www.english-heritage.org.uk/visit/whats-on/st-georges-day/9-things-you-didnt-know-about-st-george/

Bitcoin Halving Event Of 2024: The Aftermat

https://www.forbes.com/uk/advisor/investing/cryptocurrency/bitcoin-halving-event-2024/

Bitcoin Will Pass $250K, Central Banks Will Jump In Before Next Halving

https://www.ibtimes.com/bitcoin-will-pass-250k-central-banks-will-jump-before-next-halving-bitwise-cio-3730541

Gold prices hit an all-time high

https://www.cnbc.com/2024/04/01/gold-prices-hit-all-time-high-what-to-know-before-investing.html

FTSE and why it is going up

https://news.sky.com/story/ftse-100-record-highs-do-not-reflect-a-recovery-for-uk-plc-heres-why-13121695

The Rule of 72: Definition, Usefulness, and How to Use It

https://www.investopedia.com/terms/r/ruleof72.asp

Budget Planning Guide

https://tandemfinancial.co.uk/wp-content/uploads/2022/05/Budget_Planning_Factsheet.pdf

The 10/10/10 Rule For Tough Decisions

https://www.fastcompany.com/3007613/10-10-10-rule-tough-decisions

Handy Money Rules of Thumb

https://www.nerdwallet.com/article/credit-cards/handy-money-rules-of-thumb-for-a-quick-financial-checkup

Financial Rules of Thumb

https://www.getrichslowly.org/financial-rules-of-thumb/

Pareto Principle (80:20 Rule)

https://en.wikipedia.org/wiki/Pareto_principle

The Obstacle is the Way (Book)

https://tandemfinancial.co.uk/book-reviews/the-obstacle-is-the-way/

The Money Plan (Book)

https://amzn.eu/d/6wwGjOe

City Mapper (App)

https://citymapper.com/?lang=en

Red Eye (Film)

https://www.itv.com/watch/red-eye/10a4437