Rule of 72 | Biz Info


Rule of 72

Using the Rule of 72, if the inflation rate is 6%, then it takes 72 / 6 = 12 years for your money to become half its value. Likewise, if the interests rate is 4%, then it takes 72 / 4 = 18 years for your money to double its value. Therefore it is advisable for us to invest in money instruments that beat the inflation rate so that our finances won’t deplete in its value. And always spend less than you earn; so that you will have more than enough to last for your retirement. There is no need to show off by wearing yourself out to get rich and spending on expensive clothes, jewellery, etc; for it may ransom your life – as stated in the Book of Proverbs in the Bible.

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