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How to Double Your Money Using The Rule of 72 | Fastest Way To Grow Your Money | Power of Compound
Albert Einstein believed that the Rule of 72 was a more important discovery than his theory of relativity. The first reference of this rule comes from Luca Pacioli who is regarded as the “Father of Accounting”. In his 1494 book Summary of Arithmetic, Geometry, Proportions and Proportionality (Summa de Arithmetic, Geometria, Proportiono et Proportionalita) he explains the importance of this rule. Watch the whole video to find out more. Enjoy!
The Rule of 72 is perhaps the most effective tool you need to know how to double your money with compound interest. Through compound interest, our money can double several times over in our lifetimes.
The formula for the rule of 72 is 72 divided by the rate of return of your investment, which will equal the number of years it will take to double. So, depending on the interest rate, the years to double might differ. That’s why it helps to know the interest rates that your regular savings account provides vs the interest rate at a high yield savings account vs the average interest rate when you invest in the market.
The S&P 500 has been shown to average around 8% interest when adjusted for inflation, which roughly adds up to 9 years for your money to double. I recommend learning how to use the rule of 72 and understanding the power of compound interest when investing your money.
I hope that video helps explain the rule of 72 and answers your questions regarding the compounding and varying interest rates can affect your investments.
DISCLAIMER: I’m not a financial adviser. These videos are for educational purposes only. No official financial advice is being given. Please always check with a professional before making any investments or financial decisions. Your investments are your sole responsibility, these videos merely share my own opinions with no guarantee of gain or losses.
25 фев 2024
