The Magic Rule of 72

I’d like to share one of my favorite rules that has served me well over the last 15 years. It’s the “Rule of 72 and it’s a very important and easy to remember formula for financial estimates, here’s some examples:

1. At 6% interest, your money takes 72/6 or 12 years to double.

2. To double your money in 12 years, get an interest rate of 72/12 or 6.0%.

3. If your savings grow at 3% a year, then money doubles in 72/3 or 24 years.

4. If your savings growth slips to 2%, it will double in 36 years. If growth increases to 4%, then it doubles in 18 years.

5. If you can get 12% interest on savings then your nest egg will double every 6 years… amazing!

You can also use the rule of 72 for estimating the ravages of inflation and high interest loans:

1. If the inflation the rate is 3%, your money (if not invested) will lose half its value in 72/3 or 24 years.

2. If you pay 15% interest on your credit cards, the amount you owe will double in only 72/15 or 4.8 years! or if you pay 18% interest it will double in 4 years.

This is a short article, because the subject is so simple.

We owe it to ourselves and family to improve our lot and provide an income to support their needs. Creating wealth is created through three major routes

Working for money

Working for money refers to earnings as a worker, employee, or one-man business. You exchange your limited time for cash, no work no pay! This is a great way to generate cash in the short term, but to generate wealth requires a lot of saving and investment over the long term.

Money Working for you

This is where you create and multiply wealth by investing your capital and receiving returns from such investments. It’s possible to create an infinite stream of income from this method, money working for you creates sustainable wealth.

Royalties/ Passive Income

In most cases, the work is done once, but the reward flows for a long time, sometimes indefinitely. Royalties may be earned through intellectual properties such as books, works of art, films, music, computer software, inventions, designs, etc. Other sources may include multi-level marketing and affiliate programs.

The REALLY good news.

All the above methods of wealth creation can now be generated using the internet. There are so many ways to make money on the internet, but at some stage you just need to get started and the doors will start opening.

Internet marketing involves using various tools and services to let your business reach a wide base of potential customers. Good Internet marketing will attract clients, engage them and then make them very happy to purchase your products.

Most people actually fail in their Internet marketing strategies not because they lack the knowledge or the technical capabilities, but because they lack the correct mindset, don’t have a mission, get distracted and are too inclined to give in.

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