Investments

 

When an individual or a company try to sell you something whether it is life insurance or an investment, the opportunity NEVER executed to YOUR BENEFIT.

The posting is about investments, so I'll leave life insurance for another day.

About twenty-five years ago, I learned about the RULE OF 72...  this rules states that if you take the prevailing interest rate and divide that number into 72, the answer will approximate the number of years it takes for you money to double when invested at that rate.

Ten to Twelve percent are relatively good numbers to work with since over the lifetime of the stock market, the average rate of return has been between 10-12%.

72 divided by 12 is 6

72 divided by 10 is 7.2

So, if your money is invested in an account that generates a rate of return of 10-12%, then your money will double in about 6-7 years.

Large Investment Companies and Banks understand this RULE...   the money they get from you is invested in these accounts and to show their appreciation, they give you/us an ROI of between 3-5%...   5% is offered, if we are lucky.

If you have $500,000 in the bank and it is invested in a CD that is paying you interest at a rate of 5%, then you are earning about $2,000 each month.

Sure, you can generate a higher return if you play around in the stock market but you can also lose BIG TIME as well... and many investment houses charge a management fee of $1,500/year to manage your money...  on top of the extra interest, they are earning because of the Rule of 72.

Just because they are earning more than you are earning does not mean that you should not invest...  just make sure that you understand ALL THE FEES that you will be paying.

It is entirely possible that you can guarantee yourself an ROI of 5% depending upon HOW MUCH you have to invest and HOW LONG you are willing to invest it.

Don't play the stock market...  it is nothing more than a CASINO...

However, check out MUTUAL FUNDS as a possible place to invest your money and make sure that your ROI CANNOT go below 5%.