As a rational investor looking for a low-risk retirement and investing ideas that work in Nigeria, have you ever considered investment options based on the potentials to double your cash? This is exactly why I am sharing the number-based investing tip called “Rule of 72”.
The Rule of 72 is a straightforward computation used by financial analyst to estimate how long your money will double based on what you currently earn on your present investment. It’s that simple! To compute it, just divide your expected return on treasury bills, bond, fixed deposit or equities investment by 72. The end result is the number of years, month or days it will take you to multiply your money by 2.
As a young and growing investor, I always look at this number to select the best investment while considering the potential of capital loss too.
Rule of 72 may not be the perfect maths but I think its an investing concept you can easily adopt without punching calculators; you can do the calculation in your head. Let’s say you expect to earn 11% annual return on your CBN Treasury bill, the Rule of 72 lets you see that it takes 6 years and some month to double your money – this makes the idea worth paying attention to.