Rule 1: It's worth refinancing your home only if you can reduce your overall costs including the added refinancing costs. Rule 2: Go no more than two and a half times your income in overall debt to buy a home. For a down payment, only exceed 20% if you don't think you can beat the interest rate in investments. Rule 3:Your total housing payment should not exceed 30% of your net income. Total debt payments should not exceed 40% of your net income. Rule 4: To figure out what percentage of your money should not be in stocks, subtract 30 from your age and then double that number. Rule 5: Invest no more than 5% of your portfolio in your company stock – or any single company’s stock, for that matter – unless you are exceptionally well-educated on the company; even then, don’t go above 10%. Rule 6: The only way you should compare mutual fund returns is by first subtracting the fees off the top of any fund; this will expose the true value of the fund. Rule 7: Aim to build a retirement plan that contains 25 times the annual amount you want to have when you retire. So, if you want a total income of $60,000 each year when you retire, you need to have $1.5 million in your retirement account. Rule 8: If you’re not saving 20% of all of your income in excess of $20,000, you aren’t saving enough. Rule 9: Keep two months’ worth of living expenses in a bank savings account or a money market account for each person in your household. So, if four people live in your household, have eight months’ worth of living expenses. Rule 10: Aim to accumulate enough money to pay for what four years of undergraduate tuition would cost for your child on the day he or she was born. Rule 11: When you buy insurance, compare the packages at multiple insurance providers with the highest deductible you can afford. It’s the easiest way to lower your premium. Rule 12: The best credit card is a no-fee rewards card that can earn you at least 1.5% in return that you pay in full every month. But if you carry a balance, high interest rates will wipe out the benefits. Rule 13: The best ways to improve your credit score is to pay bills on time, to reduce the balance on your credit cards, and to not cancel old cards when you’ve paid off their balance. Rule 14: Anyone who contacts you at any time and requests personal information of any kind is a scam artist. You should initiate all contacts that require a personal information exchange. Rule 15: Save money on airline tickets by buying early, comparing rates, and being flexible when it comes to carriers and options. Rule 16: Don’t redeem frequent-flier miles (or points from any bonus program) unless you can get more than a dollar’s worth of air fare or other stuff for every 100 miles (or points) you spend. Rule 17: When you shop for electronics, don’t pay for an extended warranty. Rule 18: When you renovate your home, focus on the kitchen and bathrooms.
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