The Rule of 72

It simply means the length of time required to double your money. All you need to do is divide 72 by the rate of return you’re getting and you will have the number of years it will take to double your money. For example, let’s say your money is parked at the bank at the rate of 1% per annum. This formula quickly shows that it will take 72 years for you to double your money! Do you wish to wait that long or want something better, much better? Let’s say we get you into a triplex with a 10% ROI. In this case 72 divided by 10 would give you 7.2 years to double your money! Your goal should be doubling your money every 3-4 years, which means you would need an ROI of 20%, which is very feasible indeed.

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