What is the Rule of 72 and How it works
What is the Rule of 72 and How it works
The Rule of 72 is an easy way for an investor or advisor to approximate how long it will take an investment to double, based on its fixed annual rate of return.
You have to simply divide 72 by the fixed rate of return, and you’ll get a rough estimate of how long it will take for your money and portfolio to double in size.
For example, with a 12% rate of return, the simple calculation returns a time to double of six years.
Investors can use the rule when planning for retirement, education expenses, or any other long-term financial goal.
This rule of thumb can help investors understand the power of compound interest. The higher the rate of return, the shorter the amount of time it will take to double or triple an investment.
The Rule of 72 works best over long periods of time. If you’re nearing retirement, it may not be as helpful because short-term volatility can give your annual return rate less time to even out.
So that's all about the Rule of 72.
I hope you liked this informative video. Do subscribe to our channel for more such useful videos.
★☆★ MUSIC CREDIT ★☆★
Carefree by Kevin MacLeod is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/...)
Source: http://incompetech.com/music/royalty-...
Artist: http://incompetech.com/
★☆★ OUR OTHER VIDEOS ★☆★
5 Best Cryptocurrency Exchanges To Buy Altcoins - • 5 Best Cryptocurrency Exchanges To Bu...
Penny stock vs. Small cap stock | What Is the Difference Between a Penny Stock and a Small Cap Stock - • Penny stock vs. Small cap stock | Wha...
7 Best Video Conferencing Software You Must Try! - • 7 Best Video Conferencing Software Yo...
What is Shopify | How Does Shopify Works | Shopify Explained | Shopify for Ecommerce - • What is Shopify | How Does Shopify Wo...
What is Oberlo | How Does Oberlo Work | Basics of Oberlo App for Ecommerce Store Dropshipping - • What is Oberlo | How Does Oberlo Work...
5 Best Forex Trading Platforms in 2021 | Forex Currency Trading | FX Trading - • 5 Best Forex Trading Platforms in 202...
5 Best Robo Advisors | Robo-Advisor Automated Investment | Robo Advisor Investing - • 5 Best Robo Advisors in 2021 | Robo-...
★☆★ COPYRIGHT DISCLAIMER ★☆★
Some contents are used for the educational purpose under fair use. Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use.
★☆★ DISCLAIMER ★☆★
I am not a financial advisor and the content on this YouTube channel should not be seen as financial advice. These YouTube videos are for educational purposes only and merely cite my own personal opinions. You should always do your own research before implementing any advice and the content on these videos shall not be construed as tax, financial, business, legal advice. It is your responsibility to verify all information before embarking on any tips shared by me. Our content is targeted towards the US audience.
This video and description contain affiliate links, which means that if you click on one of the product links, we’ll receive a small commission. This helps supports the channel and allows us to continue to make videos like this. Thank you for the support!
#ruleof72 #compoundinterest #rule72 #moneyrules
