By Sergey Nivens @ Adobe Stock
In my conversations with you, you tell me about the trips you’re taking this summer. Trips to the grocery store, to the mountains, to the shore, and to the lake—to name a few. It’s all quite expensive, which makes times like these the perfect opportunity to explain to a young one about creating generational wealth and keeping it.
Turning nickels into quarters is hard. It takes time. But when the dollar ain’t worth a dime, you need to figure out how to put time on your side. This doesn’t have to be painful. Putting one foot in front of the other can cover some serious ground. The key is to start early and not lose a penny.
I like the Rule of 72 as a guide. If you can’t explain it without using your iPhone, then don’t teach it. Simply stated, divide 72 by your expected rate of return to determine how many years it will take to double your money. Using 6 percent, it doubles in 12 years. Teach this to a 20-year-old and show how when he’s 70, today’s $100k could be worth $1.6 million.
Action Line: Investing can be boring when you’re young. But believe me, compounding money works miracles and becomes quite fun as you get older. Enjoy. When you want to talk more about compounding your money, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.
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