Archive for the ‘Other’ Category

Should You Quit Your Job to Pursue an MBA?

Wednesday, December 19th, 2007

In general, if you don’t go to a top tier business school, it is not worth quitting your job to go.  You should instead go to an executive MBA program to get your degree or do an online program for your business degree. 

Retirement

Sunday, November 4th, 2007

A rule of thumb for how much you should have when you retire is to have 20 times your expected expenses in retirement.

Savings

Sunday, November 4th, 2007

A rule of thumb for how much you should save is about 10% of your take-home pay…if you start early enough. If you are over 40 and haven’t accumulated a sizeable nest egg, you should try and increase this amount to 30%. This rule of thumb should help you build an emergency fund, save for a house, etc.

How much house can you afford?

Sunday, November 4th, 2007

A rule of thumb for how much house you can afford is that you should try and keep the purchase price of the house less than 2.5 times your GROSS annual income. (Good luck in San Francisco, New York, or basically anywhere you’d want to live ;)

Mortgages

Sunday, November 4th, 2007

A rule of thumb for mortgage payments and mortgage size is that every $200,000 borrowed, your monthly mortgage payment will be $1,000. This rule of thumb is loosely based on a 5% mortgage rate and a 30-year mortgage.

Compound Growth — The Rule of 70 (aka the Rule of 72)

Sunday, November 4th, 2007

A good rule of thumb for estimating how long it will take for anything growing at a compound rate to double is to divide 70 by the annual growth rate as a percentage.

For example, if you wanted to know how long it would take for the value of you home to double, and you estimate that its value will increase by 5% per year, simply divide 70 by 5, which equals 14. So, if your home value appreciates 5% for year in 14 years it will be worth twice what is today.

Alternatively, this rule can be used to figure a growth rate. For example, if you know that it costs twice as much to go to the movies today as it did 10 years ago, you can divide 70 by 10 years, which equals 7. So, on average, movie ticket prices increase by 7% per year for the past 10 years.