OK, so maybe I will concede that Einstein may have stated that this was important, but I am still not convinced he “invented” it, but be that as it may, otherwise the concept of Einstein Finance might have taken off. What did Einstein have to do with the Rule of 72 ?
If you click on the calculator picture on the right you will find a PDF file that will show you a graph to show you the rule of 72 at work. Assuming your saving a set amount of money with only 1 compounding period per year, this graph is fairly accurate.
The other thing to remember is this is a DOUBLING period, and the more of those the better. Why? Remember if you find an investment that grows say by 10% a year (over year), your money doubles in 7 years (approximately), so in 21 years (approximately) your money will be 8 times what it is today! (remember 2 * 2 * 2 == 8). This is why it is so crucial to find good growth in your investments.
HOWEVER, risk is another thing to take into consideration too, and we’ll talk about that soon as well.
Double, double, double!!! Einstein Finance a new and exciting idea?