The Most Important Life Lessons are never taught in school… It blows my mind the simple things they just missed in the curriculum. Life changing things they just neglected to let us in on. I don’t know about you, but there is a list of shit I was taught in school that I have yet to use since then…..calculus……details about the War of 1812……..the temperature at which water is the densest…… Literally the list goes on and on. The worst thing is – I actually remember all these useless facts and often used them to drive my wife and mother in – law nuts. But besides that perk – they are just facts taking up precious brain space.
However, there is a very powerful number that they do not teach you in school and that number is 72. Now what is this magical number and how does it affect our lives?
Here is quite possibly the most powerful mathematical equation you’ll learn:
72 / (your current % rate of return) = Amount of Time it Takes your Investment to Double
Let me break this down for you. If you are currently getting a 3% rate of return on your investments:
72 / 3% per year = 24 years for your investment to double. Pop open this Rule of 72 Calculator and check some percentages – toss your VISA interest rate in there and try not to barf. 72/19% = 6 years
This also assumes that you are getting 3% after you pay the management fees or whatever fees are associated with the bank managing your investment.
How about that 1% you’re getting on that high interest savings account……? Well that investment should double in time for your kids or grand kids to get their inheritance.
Now how do you use this new found knowledge to your advantage?
First, take a look at all your investments look at your annual rate of return and find out what the cost is to have that financial institution manage your money.
Tax Free Savings Accounts
Really the list goes on and on, but now you MUST do that math on your personal holdings.
How long will it take your investment to double?
Ask yourself the question…is this acceptable and will this get you financially to where I want/need to be?
If not what are you going to do about it?
Do you realize that when you invest your money at a financial institution that they hand that money over to professional traders who make massive returns and then give you a fraction of that even though you were the one that put all the capital at risk?
My advice…..do what the banks do and learn to trade your own money, self-direct your investments, reduce your credit card interest rates, opt for a line of credit. Most importantly educate yourself on this game the banks play far better than 99% of the population.
In one trade you can make more than you’d get from the bank in an entire year. Changing your credit card could save you thousands, and self-directing your investments could save YEARS off your investments doubling. When you learn how to control your own money you’re not at the mercy of a system that is designed to keep people in bondage. You have the ability to create your own economy. Now this won’t happen overnight but this is what true financial freedom is. When your own economy is not tied to any specific economy. It’s not tied to the DOW, the interest rates in China or the price of oil. When you are able to make money in spite of the economy that is when you can truly start living unchained.
Example: #BlackMonday it had nothing on us. In fact we didn’t even blink an eye. Except to high five and rock out 16% growth for the day!
The rule of 72 is the one math equation they should have taught us in school.
Love what your are learning. Let us know by commenting below!