Page 81 - Charles Calhoun Book Rich As You Want To Be

invested $200 you would earn $12. If you invested $10,000
you would earn $600, $6 for each $100.
For this illustration, why don’t we begin with an
investment of $10,000 that we leave for a period of thirty-six
years. That will illustrate both the rule of 72 and the effect of

these rates of return. We will see the result of these differing
rates of return. Most people would find it difficult to leave
$10,000 invested for 36 years. That is why we each need to
have self discipline, and intentionally tell our money where
to go and how to be invested. To do that we need to have

patience as lots of time needs to pass to double our
investment a number of times. This is just an exercise. We’re
doing this to show how important your rate of return is to
your future financial well being.

2 Percent Return (Per Year)
If you invested $10,000 for thirty-six years at 2
percent, well, two divided into seventy-two goes thirty-six
times. It would take thirty-six years to double your

investment. Your $10,000 would double just once to
$20,000, which could produce an income of $1,600 per year
or about $133 per month. That is taking 8 percent per year
as income.
And since 8 percent is greater than 2 percent, the
money would eventually all be gone. That would take a bit

over fourteen years.
4 Percent Return
At 4 percent, four divided into seventy-two goes
eighteen times. Your investment would double in eighteen

years, meaning it would double twice in thirty-six years. So
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