The Rule of 72

Something I wish I was taught in High School and started when I was at least 16. I know financially I would be sitting in a much better situation financially if I got an early start on savings. But here I am at age 26, WOW, with a lot of ground to make up if I plan on retiring by age 40 still. The rule of 72 explains to us how long it will take our money to double by dividing our rate of return by 72. For example:

Many people do not save because either one, they don't have the money to, or two they don't see the potential of what "Paying Yourself First" can do. Another reason why people do not ever retire is because they simply never made a plan to do so. I promise retirement will never come if you do not plan for it. Pensions are going out the window and soon the government will no longer be able to help, so we will have to take care of ourselves. Please teach this concept and be sure that your children start this plan early. I like to show you the benefits of starting early vs starting late.

As you can see the key is to start early. I know many are probably asking where can I get 12%? I'd be more than happy to come over and show you and your family. Many banks offer up to maybe 6-7% but you must have $25,000-$50,000 to get that kind of return. That is why they have such huge buildings to work out of and we live in small homes compared to them. Mutual funds have averaged 12% over the last 30 years. Now I want you to see the potential of putting away a little money every month:

Here are a couple of examples of $200 put away every month at 8, 10 and 12% over 36 years!

Year	8%	10%	12%
6	$17,607.82	$18,519.24	$19,478.43
12	$45,547.62	$51,325.42	$57,923.42
18	$89,884.58	$109,443.58	$133,807.01
24	$160,241.76	$212,403.43	$283,587.76
30	$271,889.77	$394,803.10	$579,228.40
36	$449,061.12	$717,935.25	$1,162,770.61

Many people don't save because they don't know that they can get 12% for their money and also that a little every month amounts to a lot in the end. That is why it is so important to make sure you have a written plan and make sure you stick to it. Many people can't and never have the opportunity to see a million dollars all at once in their own bank account. It is not impossible and maybe easier than you thought it to be. If you have any questions, please feel free to leave comments, questions or any concerns. Thank you!