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复利的魔力--Rule of 72
The simplest ways to understand the power and effects of compounding is the "Rule of 72." The "Rule of 72" is a simple formula that allows you to understand how your money grows with compounding over time.
The rule: 72 ÷ rate of annually return = the years for your $ to double
So, for example, if you earned a rate of return of 8%, your money would double every 9 years, calculated as 72 ÷ 8 = 9 years.
Think about your grandchild, If you help him or her to invest 10000$ when he or she in his or her mother’s womb. With the compounding interest at 8%, what is result?
year Savings
0 10000
18 39960
25 68485
40 217245
60 1012571
70 2186064
If you grandfather do not invest $10000, do it for your grandchildren from today.
Compounding interest continuing…8% is not easy
Future is very hard to know, Certainty is cornerstone of investment, always avoid uncertainty. 8% long term annually return is not easy, if risk is not high.
To be the champion of investment in human history, Warren earned about 20% annually during his investment career. Any high expectations often contain uncertainty and leads to disappointment.
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