If you have an investment earning a certain rate of interest or ROI, the rule of 72 tells you how quickly you can double your money. Just divide 72 by the interest rate or return, and that will give you the number of years. So, for example, the long-term return on investment in U.S. stocks has been 11%. If you invest today earning the same rate of return, you will double your money in 72/11 = 6.5 years.
It's very gratifying to see that the trade we picked using our simple system for beginners making their first trade has returned 10.4% in just 10 days - that's a nice supplement to your day job! For your free report, go here.
Albert Einstein called compound interest the 8th wonder of the world, and he was a pretty smart guy. I certainly wish I'd understood this amazing thing when I was much younger - look at this illustration from the book Street Wise by Janet Bamford: if you want to have $1 million when you retire at 65, and you start saving and investing when you are 50, assuming the stock market's 70-year average return of 11% per annum you would have to save $2,199.30 per year. If you start saving when you are 15, you would have to save only $38.57 per year!
If you're still young enough (not necessarily 15, but early 20's is still good), start saving and investing now. If you're a late starter you're just going to have to save more - but do all you can to pass on the message to your children, grandchildren, nieces and nephews.
Ahhh, it's finished at last! Our comprehensive Glossary of stock market terms is now online. It was a labor of love that gave us a few sleepless nights, but we think it was worth it. Check it out here, and if you find any errors or omissions please let us know, we want it to be the best!
We are passionate about investing. While the market is open, we are excited to watch the performance of our latest stock picks. It's not just the money, it's the fact that we have used our chart-reading skills to select shares that we believe have a higher chance of going up than down. And now we can get our kicks even when the market is closed, thanks to this wonderfully addictive online game from Matthias Wandel. Study the charts, then decide whether to buy, short, or do nothing. Click forward one day at a time, making your decisions for one trading year. Then compare your results with a buy-and-hold strategy. The charts are real, but the name is concealed until the end of the year.
Thank you Matthias - we're going back to the charts!
Many companies offer a low cost way to buy shares, or even parts of shares, directly from them through their Direct Stock Plans (DSP). If you want to save and invest regularly, this is the best way to do it while avoiding the excessively-high brokerage fees on small lots. These same companies will normally offer a Dividend Re-investment Program (DRIP), where dividends are not paid in cash but are instead used to buy shares or parts of shares - this allows the power of compounding to work its magic over time.
The site below seems to be a good resource for information on participating companies: http://www.dripwizard.com/home_dripsearch.asp
I'm sure I'm preaching to the converted, but here goes. Don't even think about beginning investing if you have unpaid credit card balances - pay off the cards first, then start investing. The reason is that the card companies unfailingly charge you 18-24% interest on your unpaid balances. You have to be a very astute investor, or just have a lucky break, to make a 20% return on your investments as a newbie. So, it doesn't make sense to make, say, a 10% return on your investments, but pay 24% on your card balances - please pay off the cards first!
Copyright © 2011 Mick Brooks
Copyright © 2018 Mick Brooks