Useful Numbers and Rules of Thumb

We discuss some rules of thumb as shortcuts for dealing with many different life situations.

Erasmus : Some Key Formulae

Assessing Volume:
Volume of materials to order = L.B.D x Compression Factor
L.B.D is length times breadth times depth.
The compression factor is the extent to which the material( e.g. soil) will compress once
it is in position and compacted.

Inflation and Money Effects
72/percent interest = 72 divided by the interest-rate percent =
the number of years required for the value of an asset to double in value.

Return on Investment:
Return on investment: to qualify as a good investment it should give a return of approximately 5 to 10% as a gross return. In the old days of high interest, 10% was regarded as a minimum return. You can still occasionally get a 10% return on some investments as well, if you look hard. These days 5% is probably closer to reality. If you are doing well on the share market, a 5% gross return is quite acceptable.

Rules of Thumb

Asset Value of a Room in a Hotel/ Motel:
For a hotel/motel, gross value of a room over thousand equals rental for one night
value/1000 = daily rental figure

Weekly Residential Rental:
For a house,
Value/1000 = weekly rental figure

Double Entry Book Keeping: Allocation
For accounting,
Remember if you debit an expense account, you must credit an expense account.
You can work out pretty well everything else from this.
Assets are opposite to liabilities.
Expenses are opposite to income.

Natural Death Rate

Dr Xxxxx : Death rate per Month in any Country in the world= Population/1000.
Most people live about 80 years. 80Years * 12 months equals 960 days, hence the divisor of about 1000.
If you divide the above by 30, you get a figure of deaths per days.
These are very important for analysing stats in the CoVid Era.

A friend argued that they felt the one case of clotting found in the one million Australians vaccinated was significant. However, if you look at those stats with our divisor, 1000 of these people would normally die every month, or about 30 per day. At this rate, in this pool of people it takes about 80 years to run out of Australians. One event pales into insignificance when you realise that the normal death rate for this population size is about 30 per day or 1000 per month.

Loan Repayemnt Ratios for Banks

Erasmus : Banks will generally only loan you money to the extent that
repayments are equal to 25% of your income. This ensures you have enough money to pay your tax and live on.

You can do the sums to learn what e bank will loan you.
eg If you earn AUD80,000 per year, this means that your maximum repayment will be 20,000 per annum. So if interest rates are 3% at retail level,
you can borrow 20000/0.03 = AUD 660,000

Goo : Simples!

Kinkajou Erasmus