Compound Interest and the Rule of 72
In this Show
The ‘Rule of 72’ is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, you can know how many years it will take for your investment to double. The rule of 72 with compound interest was great back when interest rates were higher. If you gave 100K to Bank of America today, it would take 72 years for your money to double. In Japan, it costs you money to keep money in the bank. You need a new vehicle that allows you to:
1. Protect your capital
2. Give you at least a 6-10% return
3. Gives you the possibility of appreciation in the future
4. Gives you tax advantages
The bank is for people who don’t trust in themselves. You need to be doubling your money quicker than what the banks will give you. The house is about protecting money, but it doesn’t give a return or a tax advantage.
I’m seeing doubles in 3 years, 4 years, and 5 years investing in multi-family apartment buildings. This is the new compound interest. Don’t wait until you are 90 years old for your money to double!
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