Thinking about retiring soon? Trying to decide when or if you'll have enough money? Here's a quick financial tip that you can use right this minute. It's called the Rule of 72.
The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. And it goes like this:
Say you have $100,000 in your 401K plan and it has averaged a 6% return over it's life. How long until you double your money? You simply take 72 divided by the rate of return and that's how many years it will take. Example 72/6 = 9. In 9 years you would have doubled your money or have $200,000 based on this rule.
Let's say your rate is a whopping 10%. You would take 72/10 = 7.2. It would only take you 7.2 years to double your money.
It works in every situation and with every investment and it's easy.
If you have questions about your retirement, we are here to help. 80/20 Financial Services is dedicated to helping you live the retirement of your dreams. Contact us today.
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