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When
asked, most people have never heard about the Rule of 72. In
a nut shell, the Rule of 72 is how long it will take for your
money to double.
This concept might not seem important but if
you wanted to know how much money you needed to live comfortably
at retirement, this rule will show you how. Review the chart
below to see the the effects of park Vs invested money.
Albert Einstein
was asked: “What is the most important mathematical formula?” Answer: The formula for Compound Interest. |
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Based
on $10,000 |
|
Bank
Rate of 3% |
Rate
at 6% |
Rate
at 12% |
|
(Parked
Money) |
(Invested
Money) |
(Investment
Money) |
6
Years |
|
|
120,000 |
12
Years |
36,000 |
72,000 |
180,000 |
18
Years |
|
|
240,000 |
24
Years |
72,000 |
144,000 |
300,000 |
30 Years |
|
|
360,000 |
36 Years |
144,000 |
288,000 |
720,000 |
|
| |
What
does this mean and how can your benefit? Lets
explain it in plain English. If you have $25,000 in the a bank
account and you are 30 years old, how much would it be worth
at 65. Use the calculated below to compute
The
key to receiving a greater return on your money is to invest. If
you park your money in the bank, your return will take many
life times to produce.
However, apply the Rule of 72 will generate
an excellent return that you can enjoy while on the earth. So,
what should you invest in? There
are many investment vehicle such as mutual fund, annuities,
bond, etc., the point, don't park your money. |
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