Have you tried making any decisions using the 0.01% rule?
Nick Maggiulli wrote about the 0.01% Rule in his book: “The Wealth Ladder.” The concept is simple, and it’s something we can all apply when we’re spending a lot of mental energy on relatively small spending decisions. (Of course, there’s a caveat as to how many times we may want to use that rule. Please see below.)
As noted in the Wall Street Journal1: “The world of personal finance is already replete with numerical “rules” for how to spend. The 50/30/20 rule suggests proportions of needs, wants and savings for a monthly budget.”
“The 4% rule tells retirees how much they can safely withdraw from their savings each year.
“The 0.01% rule isn’t part of a long-term plan, but rather a yardstick to pull out in moments of indecision.” Adds Maggiulli, “It’s a sanity check on your spend.”
In brief, the 0.01% rule states “that if you are torn about making a purchase, you don’t need to stress about it if the amount of money at stake is 0.01% or less of your net worth. Someone with $500,000 in wealth could spend $50 worry-free…”
While using the 0.01% rule to make one-off decisions might actually be useful (e.g., Should I pay for extra legroom for a long flight? Should I treat myself to tickets to see a show?), a problem might occur when someone uses that rule on a constant basis. Using the 0.1% rule a few times a week is unlikely to change your financial trajectory, while applying the rule a few times a day might. For someone with a net worth of $500,000, spending an extra $50 once or twice per week is unlikely to have a negative long-term impact. Conversely, small additions to spending may even add to how much you enjoy life.
The 0.01% rule is probably best applied to people who have more significant means but who still agonize over small spending decisions. Someone with a net worth of $5 million, for example, may balk at the added cost for an upgraded hotel stay. Applying the 0.01% rule in that instance would translate to an additional one-time spend of up to $500, perhaps sufficient to pay for a hotel upgrade, or an additional legroom seat, or Doordash fees.
If you’ve worked a lifetime to get to where you are and you’re comfortable with your financial situation, the 0.01% rule will likely allow you to enjoy some extra perks, with little or no guilt. If the math works for you the next time you’re in a quandary about spending a few extra dollars, don’t waste time arguing with YES. Take the win and move on.
NOTE: If you want to calculate your personal 0.01% rule, please use the correct multiplier. Take your net worth, which may or may not include your home, and multiply it by 0.0001, not 0.01. Thus, a net worth of $2,000,000 x .0001 equals $200, which is 1/100 of 1% of $2,000,000. Please take note if you use the wrong multiplier: $2,000,000 x .01 equals $20,000, which is 1% of $2,000,000. Even with $2,000,000, spending an extra $20,000 a few times per week will definitely impact your financial plan!
(The reason why this is referred to as the 0.01% rule is because we commonly write percentages as whole numbers, such as 10%. Thus, 1/100 of 10% is often written as .01. But if you were to open your 65-year-old elementary school textbook, it’s likely you would see 10% written as 00.10. We would refer you to your grandchild’s math textbook, but things have changed so much we can’t even get past the Table of Contents.)
1 Pinsker, Joe. “On the Fence About a Decision on Spending? Try the 0.01% Rule.” The Wall Street Journal, 13 Sept. 2025.
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