The Rule Of 72 [Investing 101 For Women]
their liars run ron she's a runner she's a track star that's who you need to be now let's talk about three practical ways that you can double your money girl the first way is i was gonna sound like an influencer and say a lot of you have asked me how to double your money how to turn your five thousand dollars into ten thousand dollars but nobody asked me literally no not even a single person asked me for this video but here i am giving you this information anyway hi and welcome or welcome back to the channel if you're new here hello i'm vanessa and on this channel we talk all things earning more and building wealth and today girl we have a new one we have a good one in today's video we're going to be talking about an investing formula called the rule of 72. so first we're going to talk about how it relates to doubling your money and then next we're going to talk about the most important thing to think about before you start investing because that's what actually impacts how much your money grows and then later in the video i'm going to share three practical ways that our good sis kimberly has been able to double her money so make sure you watch this video all the way to the very end so that you don't miss anything but before we get into it please go ahead and hit the like button so that this video can go out to more women and help them become financially empowered number one what is the rule of 72 i'm gonna use my financial calculator to explain this one to you now the rule of 72 is a simple formula that investors use to estimate how long it would take for their money to double in value that wasn't too hard was it now imagine that kimberly has a magical savings account that gives her a return of 10 now what the rule of 72 would help kimberly do is figure out how long it would take her to double her money if she puts it in this magical savings account now with the rule of 72 all we have to do is divide 72 by 10. so it would take kimberly roughly 7.2 years to double her money however here's the thing there's no magical savings account that actually returns 10 but there is something else that i trust and a lot of investors trust because it has returned about 10 for the past 65 years and that thing is called the stock market and that leads me to number two number two now let's talk about this wonderful thing that has consistently returned an average of 10 to investors for over 60 years if you want your money to bring you more money you cannot escape investing you have to invest in something you can invest in your education your business or the stock market but no matter what you invest in here's a word that i need you to get comfortable with risk say after me risk and the return that you get on your money is actually a compensation for risk so whenever you hear returned literally you're just getting paid for taking risk so if anyone ever tells you that they have a way for you to get double your money without taking any risk at all they're liars run run she's a runner she's a track star that's who you need to be and that's exactly why your savings account would never give you a return of 10 because when you save your money in the bank the only thing that can happen to your money is that it loses its value through inflation because the risk involved in investing in stocks is higher than the risk involved in saving money the returns kimberly would get from investing in stocks would also be higher than the interest she would get from saving her money now if we go back to the rule of 72 it would take kimberly 7.2 years to double her money in the stock market it would take her a whole 72 years if she decides to rely on just interest from her savings account so the reality is that scared money makes no money so if you're a new investor always have it at the back of your mind that whenever you invest your money you're taking a risk but you get compensated in the form of returns however there are more risky assets like bitcoin ethereum have also been shown to return thousands to people who are willing to take such extreme risks with their money and before we go into number three where i talk about three practical ways for you to double your money a question to you is girl what's your risk appetite are you someone who is like no girl i'm good i'm just gonna invest in myself and make money for my business and save my money or are you the kind of person who says you know i want some of the stock market returns or are you the kind of person who says i'm willing to take extreme risks to turn my one thousand dollars into fifty thousand dollars let me know in the comment section below number three now let's talk about three practical ways that you can double your money girl the first way is to invest through an employer-sponsored 401k now when you get a job offer and you feel really good about it you're pumped to start your new role many of us don't take the time to look at the other benefits besides the salary the bonus and the option to work from home if your employer offers to match your contribution to your 401k here's what happens if you choose to invest five thousand dollars for example your employer would also put five thousand dollars to match the five thousand dollars that you put in if you put one thousand dollars they would also put one thousand dollars to match the one thousand dollars that you put in so when you're applying for jobs make sure you're looking at benefits like this because trust me girl your salary isn't everything there are other little things that can be tucked away in your contract that you should also pay attention to number two is by investing in real estate if the value of the property goes up to about 250 000 maybe because a company like google set up an office right next to your apartment complex what would happen is that you would benefit from the value of the gains and though real estate investing is capital intensive it's also a way that many investors double their money but number three is a more risky option that requires some level of skill and understanding to accurately do it and that is by trading stock options now first of all what is a stock option a stock option is a derivative that gives an investor the right but not the obligation to buy or sell a stock at a specific price on a specific date now we have call and put options but i don't want to throw anyone off in this video but if you want me to make more in-depth investing videos then let me know in the comment section below i hope you've learned something new in this video my goal is to make you more financially intelligent so that you can become financially empowered remember that i'm rooting for you so please don't stop rooting for yourself and until next time please take care