To make strides in today’s society, we need to be able to rely on more than our salaries. To be sure, we can work for money during many hours of the week. But we also need to have money working for us – all hours of the week, 24/7, even while we are sleeping.
We need investments.
There are two types of income: temporary and permanent. Salary is our temporary income. Since we aren’t going to work forever, we need the second type: the permanent income generated from our investments.
It’s never too soon to start putting money into investments. To project what kind of yield you can expect, consider the Rule of 72. The Rule of 72 is a simplified formula for figuring out how long you will have to wait for an investment to double, given a fixed interest rate. Divide 72 by the annual rate of return, and you’ll get an estimate of how many years before your initial investment doubles.
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