The Rule of 72 Explained – Double your Money - KISS Principle
As a previous financial adviser, I needed to simplify investment principles to the basic level.
The Rule of 72 is simply a formula to determine how many years it will take to double your investment, not counting dividends or interest.
Years to double = 72 / Interest Rate
At 6% interest, your money takes 72/6 or 12 years to double.
Double your money in 10 years, get an interest rate of 72/10 or 7.2%.
If your country’s GDP grows at 3% a year, the economy doubles in 72/3 or 24 years
You can also use the Rule of 72 for calculating inflation rates or interest income.
If inflation rates go from 2% to 3%, your money will lose half its value in 24 years instead of 36.
If the nations debt doubles every 8 years, such as under Bush, Clinton, Bush, Obama, and now Trump, 72/ 8 years = 9% per year.
Debt under Trump is projected to reach over 26 Trillion, with a T, when Trump leaves office. A double, at a 9% rate, could be 40 Trillion, if the Rule of 72 continues to hold true to form.
Keep stacking. Go get you some.
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Smart money is precious metals for sure!!!!!
The Smart money says the debt game cannot continue......But it does. All I can say is I sleep well at night knowing my fiat paper is limited and I am my own Reserve Bank as I have the time to stack at these low prices. Thanks for posting.
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@saklain1 It's just to remind you, the repeated use of same comment in different posts, it's a spam. So don't be a fool. Give yourself a value, keep respect!
I stopped working and inflation is my highest risk. I therefore invested quite heavily in gold. The rule of 72 I picked up at the start of my actuarial career already.