So you’ve probably seen it somewhere on the internet or you’ve talked to friends and they speak to you about the Rule of 72 and you probably just leave yourself kind of scratching your head, still not try trying to understand what it is. Well in this blogpost I’m going to explain exactly what the Rule of 72 is and why it can be important for you?  Hey there, it’s Billy with KeePon Cashflow and I’m here once again to share some tips as well as tactics with you that are going to help you to go out and make more money, going to help you to have more control over your free time. And ultimately they’re going to help you to live with a lot less stress. So if it’s your first time here, why don’t you do yourself a favor and click here subscribe to the channel.

And I just like to ask right up front, if you find value in this blogpost, could you do me a favor and like the video as well as leave your comments so I can know exactly what it was that you liked about it and share it with a friend because if this was valuable for you, I’m sure if you’re sharing it with people that are like you, they’re also going to find value in you sharing it with them. So, and I’d like to thank you for that right up front as well. So you probably got into this blogpost in some way because you wanted to understand a little bit more about the Rule of 72. Either you’ve been in a conversation and someone’s mentioned it or you’ve been reading something or you’ve been moving more and more towards investing and people are talking to you about the Rule of 72 when you maybe don’t want to feel uncomfortable and say, hmmm, I don’t really know what it is.
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First of all, I’m going to recommend, if you don’t know something, just ask the question. It’s okay. That’s the fastest way to learn, but if not, keep coming back and watching these videos. And I’m happy to share the things that I know with you because it’s going to help you do it in an environment in which you feel safe. I guess the easiest way to think about the Rule 72 is like finding a shortcut to your destination.  Like if you want to take a trip in a car, you want to know if it takes more or less two hours or more or less 15 hours, right? And then based on that, you can decide whether or not the trip is worth it for you. In its simplest form, that’s kind of what the Rule is 72 does.  The Rule of 72 basically gives you this high level estimate of how long it’s going to take you to double your money.

Like that’s really what it is. The Rule of 72 says you know how long is it going to take you to double your money at a given investment percentage.  How long is it going to take you to double your money? And I know we’ve talked about some of the different concepts in the past. Like I said, we’ve talked about the return on investment, I’ve done other videos on that. And this could also be somewhat similar to the things that we talked about, the, the payback period.  How long is it going to take you to recuperate your money? This isn’t about how long is it going to take you to get your money back, but how long is it going to take to double it?

Let’s take two examples to makes it really, really simple.

Imagine that you found an investment and that investment is going to provide you with an annualized return of let’s say 12%. Well, here’s the really easy math to figure out. You would take the number 72 and you would divide that by the 12% that we talked about and that would tell you that 72 divided by 12 is going to take you approximately six years to get the return on to double.

And if we did just the opposite and said how about we only got half of that 12% and the annualized return was 6% well, let’s do the math again.  If it’s 72 divided by 6 then this is going to take you surprise….It’s twice the amount of time or 12 years.

Hopefully those two examples help you to understand the concept.  You can use The Rule of 72 for anything, even stocks!  I like to think about investing in real estate and it’s just a really easy rule of thumb. Now if you want to be really, really precise and not a lot of people talk about this, in order to get really specific, you’d actually have to divide it by 72.73 that’s just my little tip for today because you’ve read the blog up until this point. So that was easy, right? Now you can feel comfortable talking about the Rule of 72 and even look at it as it relates to some of your investment opportunities.  You’ll be able to figure out how long is it going to take you to potentially double your money.

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So anyway, you know, I love to ask you questions. So what’d you think about the rule 72? Was it easier than you thought or was it not? And who are you going to share this video with? Don’t forget, if you found value in this post, go out, share it with others, giving it like, and definitely leave me your comments. So, and for those of you who want to know a little bit more, I’m a guy who works and lives in Europe. I invest in assets back in the United States, and I’ve spelled out a clear roadmap on how to do just that.  All you need to do is click here and you can pick up your free eBook. So this is Billy. That’s my 2 cents for today and as I always like to say, Hasta la Próxima!

You can also check out my latest podcasts and collaborations here keeponcashflow.com/podcasts/