Let Discipline and the Rule of 72 Work for YouTHE RULE OF 72How long will it take to Double Your Money!Discipline + The Rule of 72 = Debt Reduction and Early Retirement!
The Rule of 72 is a simple math formula that lets you how long it will take to double your money the value of the money:Step #1: Determine Your Interest Rate on your investment Step #2: Divided the Interest Rate into 72 Example: Interest Rate is 6% 72 / 6 = 12 (12 years your money will double at 6%) Example: $10,000 invested at 6% interest rate would be $20,000 in 12 years! Let's take a 20 year old and assume he or she has the discipline and invests $10,000 one time on their 20th Birthday. If that individual were able to get 6% for the length of the investment, how much money would he or she have when they reach 68 years old. Remember we said the money would double every 12 years. 20 years old = $10,000 32 years old = $20,000 44 years old = $40,000 56 years old = $80,000 68 years old = $160,000 $160,000.....NOT BAD FOR A ONE TIME INVESTMENT OF $10,000 Okay, let's say this 20 year old has done a lot of homework, got some good coaching from someone, and he / she finds an investment vehichle which gives him / her 12% interest over the same period. Refer back to The Rule of 72 for the multiplier 72 / 12% = money will double every 6 years. 20 years old = $10,000 26 years old = $20,000 32 years old = $40,000 38 years old = $80,000 44 years old = $160,000 50 years old = $320,000 56 years old = $640,000 62 years old = $1,280,000 68 years old = $2,560,000 Twice the interest (12% vs. 6%), but NOT TWICE THE MONEY. IT ACUTALLY COMES OUT TO 16X MORE. So, fighting for every extra percent of interest is critical to you building wealth.
