Einstein's Rule Of 72

Einstein's "RULE of 72" gives us an easy formula to figure how long it takes to...double our money! The Rule of 72 is a rule of thumb that can help you compute when your money will double at a given interest rate.  It's called the rule of 72 because at 10%, money will double every 7.2 years.

The investment can be a stock, a bond, a CD, and other ways of getting a return on your money. You don’t need a calculator and you can use this method to quickly calculate in your head how long it takes to double your money. You can use it for many purposes such as buying a car, figuring college cost, comparing interest rates, etc. All you need to do is divide 72 by the annual rate of return. The result would be approximately the number of years required for your investment to double in size.

EXAMPLE:

If you have $10,000 in a savings account at a bank, earning you 2.5%, divide 2.5% into 72 = 28.8 years to double your money.

This shows why Einstein said, "If people really understood the
Rule of 72 they would never put their money in banks!”

If you have $10,000 invested in an investment that returns 12% divide 12% into 72 = 6 years to double your money. A much better return!

Knowing this, why would you put money in a bank? It's probably the worst place to put it. They seldom pay over 4 to 5%, even in CDs. There are MUCH better places to invest your money.

How many doubles do you have left?

Doubling your money is a VERY important part of wealth accumulation.

If you are 35 years old, with money earning a measly 3% in a bank and doubling only every 24 years, you only have ONE DOUBLE by age 60. If you figure that inflation averages 3% you're just breaking even, if you don't figure the income taxes you paid on the 3% growth.

If you're 35 and your money is growing at 12%, you have SIX DOUBLES by age 60!

If you're 50 and your money is growing at 12%, you have 1.6 DOUBLES LEFT by age 60!

What is this really saying? 

Start investing as soon as you can!

Today!