Power of 72

Every heard of it?  Very important number.  Power of 72 is the magical number that you divide the interest you are making on your money by the number 72 and this will give you the amount of years it will take you to double your money.

So if you make 10% on $1000.  It will take you 7years 2 months to double that to $2000.

Pretty cool, I think.  A friend of ours was getting frustrated with how little interest he was making on his Mutual funds once everyone else took their cut.  This money he has had been sitting with them for over 10 years and was told that it would be making 8% (72 divided by 8 = 9 years) so by now his money should have doubled.  But once everyone took their 1-2% cuts he realized that he was only making about 4%  - which would be 18 years that his money would double.  Big difference, right?

That is why if you have someone else managing your money be sure to find the "actual" percentage made.  The there are no unrealistic expectations.

We had recommended to him to take out this fund and put it in a dividend stock that pays 6-8% (which their are alot of.  Then not only will he double his money in the 9 years but compound interest takes place along with reinvesting his dividend!  Adds up pretty fast  - with out paying any money to a fund manager.

Just a little thought.....