The Rule of 72 - Easily Explained in Under 3 Minutes! (2018)

Want to double your money without lifting a finger? If it sounds too good to be true, chances are you don’t know about the rule of 72. The rule of 72 was purportedly discovered by none other than Albert Einstein, who used it as a rate of return formula using compound interest. The formula worked so well that Einstein remarked compound interest was the eight wonder of the world and the most important formula ever discovered.

So if you don’t know about the rule of 72, the information in the next few minutes could entirely change your financial landscape for the better. So let’s begin.

Simply put all you do is take the number 72 and divide it by your interest rate. The number you get determines how many years it will take you to double your money as long as you don’t touch your principle and allow the interest to compound. That’s it. It’s that easy.

Just to make sure you understand, let’s look at an example. Suppose you take $1000 to the bank and can magically get a CD that earns you 8% interest every year indefinitely. If you were to leave your $1000 with the bank and never touch that original amount or the interest that accrues, it would take you just 9 years to double your money. We get that number by dividing 8 into 72 with the answer being 9. 9 is the number of years it will take you to double your money. So that $1000 now will be $2000 9 years from now. In 18 years, it becomes $4000 and in 27 it becomes $8000.
Yes, many years pass and this is not a get rich quick formula, but remember, you’re not lifting a finger to make that money.

Of course the trick is to maintain an 8% or higher interest rate every year. So that’s it. That’s the rule of 72 in a nut shell. The younger you are, the more powerful this rule is, because time is on your side. So remember, every time you blow money on useless things, that’s money that could double, triple or quadruple on its own years from now.

Bottom line, find good investments, save as much as you can and allow it to compound until you amass a small fortune for yourself. There have been countless people with regular and low-paying jobs who have retired with close to or over a million dollars due to the rule of 72 and compound interest.

The rule of 72 example in this video is perfect for wealth accumulation, personal finance and creating a great savings plan. If you are looking to build wealth, the rule of seventy-two is a must to know. I hope this video was a good education for you in one of the most important aspects of finance. Remember, compound interest is the best savings tip you will ever hear. So if you are thinking about your retirement plans, at least you know you can cover your expenses by saving a little money each money and allowing it to accumulate with interest.

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Видео The Rule of 72 - Easily Explained in Under 3 Minutes! (2018) канала Improvement Club