DOUBLE YOUR MONEY WITH THE RULE OF 72 📈 Independent Investor (Collaboration) #Best Education Page #Online Earning

today I'm excited to bring you guys a

guest video on my channel this is Ryan

from the independent investor channel on

YouTube he's going to talk to us today

about the rule of 72 he has a channel

dedicated to helping the individual

investor take control of their financial

future if you enjoy this video make sure

you jump over to his channel and

subscribe the link is in the description

so let's learn more about the rule of 72

this is the rule of 72 guys and if you

understand it honestly it can make you

powerful it's the single most old-school

tool I guess to get people excited about

the prospects of understanding you know

the power of money okay guys listen this

is the independent investor Channel

welcome I'm coming to you from New York

City New York the Big Apple it's so good

to be with you it's so important that

you understand the rule of 72 and if you

do work to understand it early on in

your life it's going to make you that

much more educated not much more

powerful first thing that you need to

understand is is what is the rule of 72

the rule of 72 is something that we can

employ to understand with a given rate

of return or a projected interest rate

on a particular investment how many

years that it will take for that

investment to double by understanding

how many doubling cycles we can have

let's say for example in your early 20s

how many doubling cycles could you

actually get on your money and what

could that mean in the future so the

very first thing that you got to

understand is a perceived rate of return

now something that I want to mention

with regard to the rule of 72 I've got

three examples of potential rates of

return you're going to see all the time

videos talking about scenarios and we

usually consistently default back to an

eight percent standard rate of return

now for examples sake I went ahead and

did 10 percent and 12 percent as an

anticipated rate of return if you start

to get above 12 percent the rule of 72

actually becomes less accurate the

higher the interest rate that you get

this is really the sweet spot and

conversely it doesn't do a whole lot of

good

to talk about interest rates below 8% on

Ryan scriveners video he talks about

inflation running at about 2% a lot of

the reason why we invest and we try to

understand this is because we're trying

to get aggressive on meeting this

minimum 8% to at least outpace inflation

that's the 2% that you just can't do

anything about guys it's just there

every year year in and year out it's

basically consuming your money so the

rate of return the rate of return goes

over here and we're basically dividing

72 which is the factor and if you take

the anticipated rate of return in this

particular example the rate of return

goes over here and you simply take 72

and divide it by the anticipated rate of

return whether it be 8 10 or 12 percent

and it's basically going to give you the

years to double which is going to be up

here what is it that this can mean for

us all right if you're 20 years old and

you're looking to get into the market

watch the videos on how to take a

thousand dollars and get into the market

alright Scribner puts out a lot of

videos on how to take a thousand dollars

and invest it the reason why those

videos are put out there is because you

want to be aggressive on making sure

that year in and year out

you're achieving at least this 8% rate

of return in those accounts okay if we

start to falter back and get less than

8% it's just going to take that much

longer for you guys to double your money

and have more doubling cycles in your

life so if you are 20 years old and you

go ahead and take this 8% anticipated

rate of return and you make that over

the course of your life basically it's

going to take nine years for your money

to double so whatever dollars are in

that account it's going to take nine

years to double so if you're 20 and you

start investing and then you're 29 it

would have been feasible to think that

your money has doubled in that nine

years right and then you add another

nine years on top of that another nine

years on top of that and that basically

is the phenomenon to kind of tell you

and give you some indication how many

doubling cycles do I have in my life I'm

20 could I get 5 or even 6 doubling

cycles and the answer is yes for a

20-year old

now if you're thirty years old and even

forty years old it doesn't mean that the

rule of 72 is not useful for you it just

means that the number of doubling cycles

is going to decrease because you have

less years to invest that's just the way

it is but in your early 20s this is

where you really need to kind of

understand this information digest it

and really understand why it is we're so

aggressive on protecting that 8% or

maybe even seeking greater returns in

excess of 8% all right now I've drawn up

an example for you guys to kind of

understand and I used $1,000 again

because I I mentioned you know I've

watched Ryan scriveners videos about how

to invest a thousand how to invest five

or ten or twenty five right he's trying

to capture those groups of folks who

have saved up to enter the market and I

think the majority of people who are

looking to get into the market probably

have saved a thousand dollars and they

have no idea how to go about doing it or

even why they're going about doing it

and the rule of 72 really can answer the

why portion of it if you end up taking a

thousand dollars and that's your initial

deposit into that account and you end up

investing for 40 years and we're going

to apply a drip which is a dividend

reinvestment program on this particular

example and I used three hundred dollars

a month okay a lot of you guys out there

have that money can put it aside and can

put it to work for yourself month in and

month out year in and year out to work

for yourself now the effect of a

dividend reinvestment program really is

a whole nother video for a whole nother

time and you can tune in to other videos

to really understand the effect of the

drip $1,000 initial over a 40-year time

horizon and $300 a month and you're

probably watching this and you're going

I can do that I can do that here's where

it gets tricky you really need to pay

attention this is where most people fall

off a cliff okay and they make a huge

mistake and you're 20 years old and

you're excited because you've got a

thousand what's they've got 5,000 anyway

I want to invest I'm going to put this

to work I've got five or six doubling

cycles on the side

want to invest I'm good here check Ryan

I'm good 300 months I'm going to boost

that up to 400 months I can do that now

you've got this decision to make oK

you've got 40 years to invest $1,000

initial and 300 a month but you have a

decision to make over here what account

are you going to go into to make sure

that you realize the maximum benefit

back in a zero fee account you're going

to realize this 8 percent rate of return

minus inflation again there's nothing I

can do about inflation I wish there was

but there's not and you either have a

choice to pick over here a 0% fee based

account or your over here and you have a

choice to go into a managed program if

you end up going here with the zero fee

account all right you get this 8% rate

of return in this particular example

you're going to be at 990 four thousand

two hundred and sixty-five dollars all

right and I'm certain that my viewing

audience is going to give me credit for

me calling this 1 million dollars

because it is it's a million bucks the

decision to come over here into a

fee-based account a managed situation

where the financial institution industry

averages just over 3% is going to only

render you back same scenario of 8%

thousand dollars down $300 a month

that's going to render you four hundred

and fifty three thousand six hundred and

nine dollars over this same forty year

horizon you run the five percent through

the rule of 72 it takes your money 15

years to double not nine but if you're

excited about investing you've got this

check and you've got this check for your

monthly contribution and you have a

forty or more time horizon look at the

impact of a decision that this makes

this is over a half a million dollars

guys as half a million dollars is gone

it's lost its lost to fees and

management fees and a final thing I just

want to mention is the effect of the

drip on this particular situation puts

you up to a million dollars in this

account this is based on compounding

interest rate and the rule of 72

basically gives you a snapshot of why

compounding interest works all right if

you end up investing with no

and reinvestment program at $300 a month

over this same scenario your initial

investment of $1,000 that goes into that

account is going to actually double four

and a half times over this forty year

time horizon this is what you're going

to be rendered twenty one thousand seven

hundred and twenty four guys and this is

why we talked about the rule of 72 as

being something that it's a powerful

tool it's an old-school tool but it's

old-school and it's good and it's valid

with all the information that we have

online now guys it's just another tool

for you guys to put into your tool bag

and make it that much better of an

informed investor guys thank you so much

for tuning into the video if you have

any comments on the rule of 72 how it

could apply to you or any questions

about anything that was talked about

leave those comments in the bottom

section of the video please subscribe to

the channel support the channel there's

a lot of guys online really trying to

give a genuine message and really I

think a lot of us are aimed at really

just helping people understand this

because you know a lot of us you know we

read a lot and it's taken us a lifetime

you know to understand this information

and hopefully we can try to streamline

some of that information for you guys

directly because I think a lot of our

fundamental aim is helping you know new

investors that are looking to get

started and getting exposed to the

market investing is not one of those

things that we either choose or not

choose to do okay I feel like it's

something that you have to do you have

to do and the sooner you take that

initiative to understand investing and

some of the concepts like the rule of 72

the better off you guys are going to be

in the future thank you so much for

tuning in good luck in your investment

future

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