What is the rule of 72 In Investing

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If you want to know how many years it will take to double your money, you can use the rule o 72. Let’s say you can invest your money at 8% return on investment. Now simply divide 72 by 8. The result is 9. In other words , it will take you 9 years to double your money at 8% return on investment.

There is nothing such as ” short term investing”:

Believe it or not , the term “short term investment” is an oxymoron. As a matter of fact, such a thing is more of a speculation rather than investing. Investment is a commitment of expanding capital in pursuit of long term goals in your life.

It’s all about risk and return:

The higher the risk , the higher the return. This is true for investments. If you are not willing to take a risk with money , chances of earning good returns are negligible. However, that doesn’t mean you take rash risk; you need to asses risk and decide how you can deal with it before making investment.

Mere information won’t work for you:

For investments, it is important to understand that knowing the facts is not knowledge. The ability to use the information or facts to your advantage ( by building your wealth) is true knowledge.

Have a well-balanced investment portfolio

You never know what disappoints you or what gets you great returns. Therefore, the secret lies in having a well balanced portfolio that features diversified assets classes such as cash, fixed deposits, equities, shares, etc.

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