Personal Finance

The Rule of 72 shows you how to determine the number of years it will take for your investment or
debt to double in value.
Divide the number 72 by the percentage rate you are paying on your debt, or earning on your
investment. Here are two examples...

You took a cash advance on your credit card for $1,000, which is charging you 18% interest. 72
divided by 18 is 4. That makes 4 the number of years it would take for your debt to your credit card
company to double to $2,000 if you did not make any payments toward principal.
<p>You have a savings account with $500 deposited in it. It earns 4% interest from the bank. 72
divided by 4 is 18. It will take 18 years for your $500 to double to $1,000 if you don't make any
deposits.

Remember: 72 divided by the Interest Percentage is the number of years it takes to double.

Step 2 of 2: How many times will my money double?

This step teaches you how important it is for your money to double as many times as possible, and
for your debts to double as few times as possible.
Determine how many years you will keep your investment before cashing it in. Divide that by the
number of years it will take to double each time, the number you figured out in step one.
Now look at what happens to your money each time it doubles...

$1 ... $2 ... $4 ... $8 ... $16 ... $32 ... $64 ... $128 ...

You can see that it makes a big difference how many times your money doubles. If you can make it
double only a few more times by making just slightly better investments, you can end up with many
times more money at retirement, or whenever you cash in your investment.

Think about how fast your debts can double with high interest rates, such as those charged on most
credit card accounts. Online financial calculators are a great way to determine how money doubles.
Click here to use a free online compound interest calculator.

Obtaining credit can be incredibly easy or extremely difficult. Once you have established credit, it can
open doors of opportunity you never even considered being a possibility. Credit can allow you to take
the dream vacation of a lifetime, drive a luxury car, dress in the latest fashions, achieve the American
dream of owning your own home, or starting your very own business.

The fact is, now that society has rapidly shifted into the fast-lane of being a cashless society, it would
be almost unthinkable not to have credit. People who have the misfortune of losing their good credit
rating in today's world, will most certainly immediately begin to feel like social outcasts.

It is a very traumatic experience when people find out something is wrong with their credit. Millions of
people have been, and will continue to be notified they now have bad credit. Many don't seem to
understand how it all came about! What they do know, however, is that all of a sudden they aren't as
well-off as someone who still has their good credit.

Without good credit, people soon discover it's difficult to just keep up with the no-frills, everyday
existence items that are needed. Unless an individual knows how to improve, increase and repair their
own credit, they will have to overcome many obstacles.

Most people don't have the slightest idea of where to begin. But once you get started you will learn
how to quickly improve and repair your credit starting Today!

On your first attempt to get credit, you may face a common frustration: sometimes it seems you have
to already have credit to get credit. Some creditors will look only at your salary and job and the other
financial information you put on your application. But most also want to know about your track record
in handling credit--how reliably you've repaid past debts. They turn to the records kept by credit
bureaus or credit reporting agencies whose business is to collect and store information about
borrowers that is routinely supplied by many lenders.

These records include the amount of credit you have received and how faithfully you've paid it back.
Click here to learn more.