Finance Tip for The Everygirl
In the Investing 101 Part 1 feature you learned that the Rule of 72 tells us how many years it takes to double our money. Here is another rule to know, the Rule of 115. Divide 115 by your rate of return to calculate how many years it will take to triple your money. For example, if you have $5,000 today earning 8% rate of return, you will have $15,000 14.4 years from now and $45,000 28.8 years from now.
The Rules of 72 and 115 are mathematical concepts and do not guarantee investment results nor function as a predictor of how an investment will perform. They are an approximation of the impact of a targeted rate of return. Investments are subject to fluctuating returns and there is no assurance that any investment will double or triple in value. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This post was contributed by Brittney Castro, CFP® professional and creator of www.FinanciallyWiseWomen.com. Brittney Castro is not affiliated with Theeverygirl.com. Brittney A. Castro is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. California Insurance License #0F33895