Learn About How The Rule Of 72 And Tax Favored Investing Can Help You Retire
Let’s say you have $100,000 earning 7% and applying the rule of 72 (your money will double in 10 years at an annual growth of 7.2%) your $100,000 should be nearly doubled in 10 years to @$200,000. So now that we have protected it from potential market loss and provided a predictable growth rate for income we can be sure we have maximized our protection of this portion of our savings income power.
Alternatively if we wanted to protect our $100,000 from market risk we might have to settle for a low fixed interest rate. Currently fixed rates fall between 1.5% and 2.5%, and at a rate of 2.5%, after 10 years your $100,000 may only be worth @128,000