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Chacko Varghese (Jacob)'s Blog

By Jacob Varghese | Mortgage Broker
or Lender in San Jose, CA

Rule of 72!!

People in the financial industry and the Bankers know about the Rule of 72. What  is this Rule of 72?

Let me illustrate it with an example:

Imagine you have money in the bank at 3%. Your money will double in 72/3  years ie 24 years.

However imagine you invest it at a place which where you get 12%. In this  case money doubles in 72/12= 6 years. Yes 6 years!!

Hence the important question to ask yourself is what is the expected rate of  return on your investments or what is the current rate of return you are  getting?

Keep in mind you have to know your risk tolerance before investing!!

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