Doubling Investments With The ‘Rule Of 72’

A lot of people invest because they know they can earn money even amidst a struggling economy. But how long does it take an individual to grow their hard-earned money? Some investors double their wealth in a decade, but others take longer than the usual. Studies say one can have twice as much wealth in a decade if they invest in stocks or 72 years in a savings account.

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It pays to understand the math of investments.

The market can go down in a year, and investors will have to wait a couple more years to see the light in their investments. And this is the reason people should invest money that they won’t be needing for the coming years in stocks.

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The “Rule of 72” is a way for investors to find out how their investments can double in a given fixed annual rate of interest. The annual rate of return is divided by 72 so investors can have an estimate of how many years it can take them to duplicate their initial investment.

For example, if a dollar is invested at 10 percent, it would take the investor 7.2 years for it to double into $2. The Rule of 72 is accurate when it comes to low rates of return. This simple math rule can be extremely helpful for those who want to learn more about their investments.

Learn more about business and investment trends when you visit this Fred B. Barbara blog.

What College Graduates Need To Know About Investing

Finding a job is probably the first thing on every graduate’s mind after finishing their studies. And rightfully so, with the capacity to finally earn income and be financially healthy. It is important, as well, to understand that a huge contribution to financial health is increasing the number of sources of income, which includes investing.

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By learning to invest early on, good habits are formed, which will eventually pay off in the future. And for the new graduates, embracing investments can be to their advantage. For one, they do not have family responsibilities yet to prioritize. Emergency expenses are also scarce. Investing at a young age, therefore, can maximize potential profit.

One thing first-time employees should learn is how to max out their 401(k). Some employers offer retirement savings plans such as the 401(k). By forcing savings, the chances of spending money by mistake is minimized. Similarly, whatever cash is taken home after taxes and contributions, a saving-spending budget should be made.

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There are a lot of options to invest in including mutual funds, stock market, and business investment. And time may be needed to learn what is the most suitable one. While waiting, saving money should be a priority. The best way to start any investment is to have enough financial capacity to do so.

Fred B. Barbara, at a young age of 18, started his trucking business, and then grew his investments over time. Learn more about ventures by following his Facebook account.