Trading Tip #6

Do you know about the Rule of 72? Rule 72 is a easy tool to determine a set interest rate and how long it'll will take with the scheduled payment for the interest to double the amount.

source - http://www.successfinancialfreedom.com/2016/08/29/einsteins-rule-of-72/

here I found this video which explains it very fast and makes it very simple to understand.

So Let's Talk about how to get paid from the Rule 72!!!

I use it is I find dividend stocks or crypto mining shares that pay at least 10% in interest a year.

so for example stock "XYZ" cost $5.00 dollars and its at a 52 week low and has an upside potential to $15 dollars. "XYZ" stock also pays a 10% dividend. So to make huge gains, I can triple my money if it goes up but if it maintains the $5 dollars in 7.2 years my initial deposit into the company doubles. So i use passive cash flow and capital gains to make my money work for me. In this scenario I can also triple the stock amount if it hits its high.

You can also use it when getting into mining shares for bitcoin that pays 1% a day and if you do that for rule of 72 your investment should double every 72 days.

Another example is for steemit savings account.

If the account pays 10% yearly then it will take 7.2 years for that initial balance to double. Now remember the dollar amount toward steemit might change by time you get all your currency but if it goes up or down you still have your currency working for you and you not working for it.

image source - http://indianmoney.com/how/growth-of-money-market-in-india

So if you have any questions or comments please leave them below and thank you for reading!!!