Rule Of 72

Short, sweet and so important that you're going to want to read this again.

Question: What is the number one reason to invest more aggressively and have a properly managed portfolio?

Answer: The rule of 72.

The rule of 72 is defined as this: A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double. (Investopedia)

Are you only getting a 3% return on your money each year? If so, it will take you 24 years to double your money!

Can you get 8% on your money each year somewhere else? If so, it will only take you 9 years to double your money!

What does that really mean in time and dollars?

Let's say you're 25 years old and you have $25,000 to invest. If you are getting 3% a year on your portfolio, by the time you retire at 60 years of age you will have approx. $70,000.

If your portfolio with the same $25,000 starting point gets 8% a year, at age 60 you will have approx. $200,000.

Which do you want to have?

$70,000 or $200,000?

The choice is up to you, but I think I already know which one you want.

Achieving maximum benefit from your investments is dependent on doubling your money as much as you can in your investing lifetime. Talk to me to find out how many doubles you can get.

Have a great week!

Matthew George