| If you are like me and many other Americans, | | | | out. That's why they charge you a ridiculous |
| you were probably never taught a personal | | | | amount of interest to borrow money and then |
| finance course in high school or college. I find this | | | | turn around and pay you peanuts on the same |
| very interesting because having control of your | | | | money they probably lended right back to you! |
| finances is probably one of the most important | | | | If you think about, if a bank charges you 12% for |
| skills you must have to be successful in life. | | | | a credit card and you receive 2% on your |
| There are so many people struggling with debt | | | | savings. You double their money every 6 years |
| and other financial issues due to their lack of | | | | (72 divided by 12) and your money doubles every |
| knowledge...... It's pretty sad to see. One of the | | | | 36 years (72 divided by 2). That's why people can |
| main reasons people end up in these situations is | | | | take years and years to pay of a small balance |
| because they do not understand the money rule. | | | | on their credit cards...crazy isn't it. |
| What is the money rule you ask....well I am | | | | So what's the solution? |
| referring to the rule of 72. | | | | You need to do what the banks do and try to |
| The rule of 72 is used to determine how fast it | | | | earn as much interest as possible on your money! |
| takes for your money to double at a certain | | | | How do you do this, well you need to take your |
| interest rate. | | | | non emergency money out of the bank and put it |
| You take the interest you are earning on your | | | | in a vehicle that will earn you a better interest |
| money and divide it into 72 and that gives you | | | | rate! |
| the number of years it would take your money | | | | My suggestions are Universal life insurance and |
| to double. For example if you were receiving 2% | | | | annuities. |
| interest on $1000, it would take 36 years for | | | | Why? Because when you put your money in |
| your money to double to $2000. | | | | these vehicles they have the potential to get as |
| I know, that's a long time isn't it. That's the | | | | much as 12% interest and sometimes more for |
| problem! Where do most people keep their | | | | your money depending on the specific product |
| money...in the bank right? Well most banks pay | | | | you choose. In addition to that, your money |
| you an average of 2% on your savings accounts | | | | grows tax deferred (unlike in a bank) so you don't |
| and cd's right? | | | | get taxed every year on your gains. Also you can |
| Let's take a deeper look at this, how many of | | | | set these vehicles up so that you can access |
| you reading this have credit cards and loans? | | | | your money tax free also. |
| Probably everyone right? Well do you know how | | | | With annuities there are usually no administrative |
| much interest you pay on your credit card? Most | | | | fees unlike when you invest in a mutual fund...this |
| likely anywhere between 8-30% right? So who is | | | | helps your money grow quicker. |
| the big loser in this picture? We are, if we don't | | | | There are many more advantages and if you |
| know how to use the rule of 72 for us and not | | | | would like to know them all, feel free to contact |
| against us. | | | | me. I hope you enjoyed this article. |
| You see banking institutions know this rule inside | | | | |