The Worlds Best Get Rich Quick Formula!
June 20, 2008 by ShannonCherry
Filed under Business
The Worlds Best Get Rich Quick Formula!
Have you ever wondered how the wealthy get wealthier?
I’m sure most of you can guess that real estate is one way, but there is
another. Its called compound interest. There is a formula that has been around for years. This formula is called the Rule of 72. The genius physicist, Einstein, regaled compound interest as the ninth wonder of the world!
The Rule of 72 tells you exactly how many years it will take for your money to double when calculating compound interest.
For example:
72 divided by interest rate of return = # of years it takes for your money to double.
So lets say you have $1,000 in your on line money market account and it is earning 3%. To figure out how many years it would take you to double your money, take 72 and divide it by 3% which would equal 24. It will take 24 years until you see your money double to $2,000!
To make this even more exciting, lets take that same formula but change the interest rate to 9%. Take 72 and divide it by 9%, which equals 8 years. What a huge difference a few more points can make! This concept is the big reason why you need to look at your savings account to see what your interest rate is. If the interest rate you are getting is .05% like most regular savings accounts, it could take you a really long time to see any amount of increase in your account! Now do you see why the interest rate you get when saving is so important to you?
When you understand this formula you can take it one step further and add your age into the equation.
Say today, you are 40; you have $20,000 in a savings account earning you 3%. With the calculation of the Rule of 72, you will be 64 years old before you will see your hard earned money double to $40,000. Change that savings interest rate to 9%, and in 8 years, and at age 48, your money will double to $40,000. By 56 you will see it double again! Which would you choose?
This is one of my favorite financial concepts to teach. Many of us do not realize what a difference a couple percentage points make, but in reality, just having this knowledge can make you rich quicker!
Janet Foust gives you the tools to powerfully partner the inner and outer strategies of your financial wealth to attract more freedom, joy and abundance to your life. Go to: http://www.wealthharvest.com to learn more about her and sign up for a free e-course!
Compound interest is indeed one of the most powerful forces in the universe. The only issue I have with your article though is one of practicality. Show me where I can get a 9% return on my money outside of the bond and stock markets (for savings whether money market or CDs last I checked was in the 2-5% range). To get those kinds of returns (9%+) usually involves taking on risk. Not necessarily a show-stopper, but something that needs to be addressed and understood. The concept is sound however.
They should these advice in elementary school.
This is important for everyone to understand, not only small businesses.
hullo tha\nkx thats a geneous thought,
i would like to ask you if you can provide any other simple method of getting rich quick, with less or no capital which suites the average, Joe, or shuwu living in a poverished country called Uganda East Africa, where there is low technology levels etc,
pliz relp me and offer good advice or any financial assistance becouse am fed up of the Rat race, and living under this biotting poverty of one meal a day!!!!!!
Tel; +256712567618
Uganda East Africa
God bless you.