The Rule of 72 and Other Investment Rules You Should Know

In this episode I want to take a step back to the basics of investing and remember why we invest.  A lot of times I see people get hung up on trying to figure out the best stock, the best ETF, the best mutual fund or the best investment strategy...you name it...which are all important but I see people fail to really grasp what you actually are doing when you invest and why you do it?  And the answer to that is, you are really trying to take advantage of compound interest, yes, the magical world of compound interest.  I think reviewing the Rule of 72, and some other important investment rules of thumb you should know will help you see the power of compound interest and at the same time help you sound smarter in investment conversations after knowing these rules.   Rule of 72: Time for investment to double = 72 / %age Rate of Return Rule of 114: Time for investment to triple = 114/ %age Rate of Return Rule of 144:  Time for investment to double = 144 / %age Rate of Return Rule of 1.5:  For a stream of investments (we’ll assume annual investments) where the number of years times the interest equals 72 the ending value will equal approximately 1.5 times the amount invested.   Please visit www.rhitch.com/resources for more information.   Ryan Hitchcock Financial Planner High Point Capital Group   Direct: 414-253-4611 [email protected]   Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is not guarantee of future results.  Securities and investment advisory services offered through SagePoint Financial, Inc. (SPF), member FINRA/SIPC. SPF is separately owned and other entities and/or marketing names, products or services referenced here are independent of SPF.    1200 N. Mayfair Rd., Suite 300, Milwaukee, WI 53226. Phone: 414-253-4600.