*Have you ever heard of the rule of 72 before this video? Let's get this video to 2k likes!* P.S. - A BIG shoutout to all the people who subscribe to my channel just to give my videos a downvote, you're my biggest fans! :)
I went to a vocational High School and my “major” was finance so a lot of what you go over I was taught in high school including this it’s one of the main things I remember. The majority of your content is stuff that I didn’t know about or didn’t fully understand. I’m appreciative of the fact that I probably had a better personal finance course than other people my age but I do think your videos are just as useful if not better because if I’m not learning something I’m freshening up on some of the stuff I learned.
Robs Rule # 32. Told a 30 year old recently, if you’re not a millionaire by 70, you’re doing it wrong. I try to help kids by showing them how to get ahead by planning. I use the rule of 72 frequently along with my 70 years of life experiences. I hope a lot of youngster see this, you explain it so simply. Kudos, excellent!
You are now way ahead of the game. Save your money in index funds and you will be a millionaire by the time your 50. Live modestly and use your money on investments.
Its good stuff :). The only thing I would say I wanted was to let people know to adjust for inflation. So essentially take away around 3%, so really its only growing at 1% in the 4% calculation. Also, making sure they account for taxes depending upon the investment product they choose of course.
Despite the fact that stock prices fluctuate, what is the best method for capitalizing on the current market? I'm still undecided about investing $400k in my stock portfolio.
The market is volatile at this time, hence I will advice you get yourself a financial advisor that can provide you with entry and exit points on the share/etf you focus on.
I was recently through an investing nightmare during the crash in march 2020. With the assistance of my advisor I have so far grown my dwindling portfolio of $145k to $480k
My consultant is Nicole Desiree Simon She has since provide entry and exit points on the securities I focus on. You can look her up online if you care for supervision.
I once graphed (using excel) the rule of 72 vs the actual time to double money (using a much more complex and accurate formula.) The two curves were remarkably close. They drifted apart at the extreme ends but it's an amazingly close approximation for most values we'd come across.
@@WhiteBoardFinance Wow, I just graphed that too. (Found the old spreadsheet from a long time ago; I had actually had the 72 in a cell and changed it to 69.3.) Closer than 72 but what goes into 69.3 easily? I think 0.1, 0.693, 6.93, and 69.3. :-). Somehow the Rule of 72 seems a tad more practical.
@@WhiteBoardFinance "The rule of 69.3 is more accurate" To be more accurate: "The rule of 69.3 is more accurate around 0%" while "The rule of 72 is more accurate around 7%". Both lose accuracy moving away from their optimal point. Still a cool thing to know though, makes ball park ttd calculations without a calculator with a log function a breeze. Upvote given.
I learned this rule back in the early 1990's from my buddies uncle who was a chiropractor. He taught us about mutual funds & how to invest monthly etc. This Rule of 72 is what every lending institution knows, yet they don't want you to know. They don't teach it in school. My wife has her MBA in Finance & even she didn't know the Rule of 72. LOL
Hi Marko and Fans. I "recently" found the channel and instantly got hooked to your very knowledgeable, professional, authentic and humours contents. I am an average person actively seeking to improve upon financial knowledge. I cannot thank you enough for your "OUTSTANDING" service to humanity and particularly those who are seekers of knowledge for success. The Rule 72 was very easy to understand, extremely Important & Useful and, "flawlessly" done.. I have gained a lot from it and again ...Thank you so very much. Happy Subscriber!
This is phenomenal and one of the best breakdowns I've ever seen. I put my money into trading Forex (trading fiat currencies, metals, indices, etc) and I've found that the average trader can make 1% to over 10% a day trading their money, and compounding it daily is amazing, versus letting it sit in some account for years and years. Of course there's risk in it all but, I chose to educate myself properly and build the discipline to be a well leveraged trader. Question, do you trade in the Forex market?
I learned this almost 40 years ago in college myself and I’ve applied it the rest of my life. I have tried to instill this into my kids and grandkids as well but you can lead it to water but you can’t make them drink. They’ll probably inherit what I’ve saved, but heck I won’t need it. Thanks for the info it’s always good to see a refresher.
Thank you for sharing this. I know now I will teach this to my 6 and 7 year old daughters as soon as they can understand it and encourage them to invest at the earliest. I wish I had known this earlier...
(1+x*0.01)^(y/x)=2, the answer is y/x=ln(2)/ln(1+x*0.01). Some samples, x=0.01,y=69.32 x=1,y=69.66 x=3,y=70.35 x=6,y=71.37 x=8,y=72.05 x=9,y=72.39 x=10,y=72.73 x=20,y=76.04 So, when x is smaller than 3, use rule 70, when 3
If you invest $200,545 into the S&P, then assuming a 10% annual rate of return, your child at an early retirement age will be 2 Million plus rich, excluding every other income channeled to this. We need to invest much more. Focus on the company not just the stock price, true words from my F.A James Fletcher Brennan..I made over half a million from ALB and NVDA..I love passive income.
I'm convinced that all of these finance jargon, unnecessary extra steps, and weird math are used to scare away hard-working people from claiming what their companies actually owe them for all of their hard work and for this sole reason I make sure I use an advisor.
My method is to buy quality firms, anticipate to hold them regardless of what happens, pay up but not too much, keep track, sell only when necessary, and be ready to course correct.
When it comes to stocks and investing, most people don't know where to start. Fortunately, great investors of the past and present can provide us with guidance
@@freepilot7732 That's awesome! I found out about this way later in life! 😔💔 Even though I graduated in Economics! Not until I turned 40 did I find this amazing tool.
When I first watched one of your videos, I wasn't too into it. A little monotoned. The channel kept showing in my feed so I watched a few more and That joke "It's a government stork" has me laughing and subscribing!! Plus the content is very informative and good-to-know stuff.
Keep up the good work Marco! This is a'll a numbers game and it is what the next generation must have some basic knowledge - i have mates in their 30-40s who know nothing about this
I’ve been using the rule of 72 for 40 years for quick and dirty calculations in my head,,,, people freak at how quick you can get close to the real answer....
It can be freakier if you are able to use the Rule of 40M to estimate the return for 3x, 4x, and 5x as well. Feel free to check out a video I made on it, link: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-aCHFgOCX1hU.html
Brilliant, I had never heard of this rule as well and I spent 6 years in University studying engineering. All of my math was way too complex and pretty much of no use.
You're very funny and entertaining, I don't care how corny, when present the info very well I wasn't bored, will recommend to my less financially smart friends, but definitely, not so much to my artsy friends.
@@FlamingBasketballClub I'm on the road to financial Independence, starting from a negative net worth. I'm sharing everything I know along the way (including investing in real estate) to try and help others out.
Marko, are you by any chance from a bulgarian descent?? You once mensiond your parents came from East Europe and I also saw something that really resembled a "baklitsa" on your mantle piece... So I thought if you came from BG you would know what finncial hell we live in here... And THANK YOU for all those good lessons! :)
It's good that you're teaching this. An even simpler rule of thumb to know that is based off this is that the stock market doubles your money on average every 10 years in real terms and every 7 years nominally. This is assuming typical S&P returns of 7% real and 10% nominal, and of course is not guaranteed, but that's the average result (so a 20-year old can see that every $1k they put in the stock market is worth $16k in the dollars of the same year retiring early 60s). On a tangeant, I think knowing the difference between real inflation-adjusted growth and nominal pre-inflation growth is one of the most important things people can know as well.
Hey Marko, What is the relevance of the number of 72? You explained the denominator as the number of set periods, but where did 72 come from and how is it a reliable number to calculate against?
And here I thought you were going to tell us what investment actually gives us a 9% return every year, year after year. Let's make that your next video! Great video Marco, I am on your waiting list. Thanks!
outstanding video. I'm a financial advisor and teach this to my clients. I have a double bachelors in accounting and financing. In my 5 years of college I never learned this until I became an advisor. The banks, mortgage inc, and credit cards companies don't want you to know this. Keep you poor and them rich. Real financing is 5th grade level math. There are plenty of books at your local library or local book store that teach real usable financing for the average joe.
Rule of 72 will give you a correct answer of years and months down to about 5%. For example, the Rule of 72 might give you a answer to double your money in 7 years 11 months. Where if you did the calculation in Calculus, it might give you a real answer of 7 years 5 months. So the rule of 72 is much easier and gives you close to the right answer anyway.
The rule of 72 is genuinely the GOAT life hack for estimating compounding. The human brain isn't very good with exponential mathematics at all, so this always comes in handy!
