The Rule of 72 - taking charge of your own investment
Those in the know say that with the Rule of 72 you can estimate the future value of your investments with "uncanny" reliability.
Certified financial planner Paul Roelofse confirms that in a world of complicated financial calculations, it can indeed be a magic number for the layperson.
He says the Rule of 72 has two invaluable uses:
to estimate how much your money will be worth into the future
to understand how your purchasing power will diminish over time
For example, if I have an interest rate of 12% and I divide 12 into 72, the number is 6. What that represents is that it will 6 years for my money to double.Paul Roelofse, Certified financial planner
Roelofse says doing this calculation will focus your attention on how important the return on your investment is, instead of just thinking vaguely "oh, it looks like it's doing well".
So it's a question of taking charge of your investment yourself while taking into account your financial consultant's advice?
Sometimes I think we actually abdicate that real responsibility to our advisers.Paul Roelofse, Certified financial planner
For more advice from Roelofse and the role of the Reserve Bank as the custodian of inflation in South Africa, take a listen:
This article first appeared on 702 : The Rule of 72 - taking charge of your own investment
Millions of people in South Africa’s livelihoods depend on tourism, says Manny De Freitas (DA Shadow Minister for Tourism).Read More
Clement Manyathela interviews Eskom spokesperson Sikhonathi Mantshansha.Read More
Anelda Martin is the owner of the Goddess Cafe in Pretoria and she is looking to revive the roadhouse.Read More
Oceana fishing has deferred their interim dividend payout due to Covid19, but says all is well.Read More
Absa is ending its R140m a season sponsorship of SA’s Premier Soccer League (PSL), after a 13-year relationship.Read More
Covid-19 and race riots - is President Donald Trump's re-election campaign collapsing?Read More
Tips and tricks to fight dampness and mould without breaking the bank, by remedial building consultant Angelo d’Ambrosio.Read More
We can thank our lucky stars that Lesetja Kganyago - the world’s best central banker – is ours. Kieno Kammies interviews him.Read More
FlySafair CMO Kirby Gordon says research shows keeping a seat open or 'neutralised' does not stop the spread of Covid-19.Read More
Car rental firms may soon start flooding the second-hand car market at a time when demand is non-existent, says Lance Branquinho.Read More