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How to Skyrocket Your Retirement Fund

by J.P. Vaughan   

Investing in real estate or discounted paper is a wonderful way to increase the size of your retirement fund rapidly. The "Rule of 72" explains why. The Rule of 72 is a banker's rule that calculates the number of years it will take for a sum of money to double. You divide the number 72 by the annual percentage rate you are receiving on that sum of money. For example, if you are earning 6% interest on a CD, divide 72 by 6:

72 / 6 = 12 years


The Rule of 72 tells us that if you are earning 6% interest, your money will double in 12 years. How long will it take for your money to double if you are earning a 30% return?

72 / 30 = 2.4 years


At a 30% annual rate of return, your money doubles every 2.4 years. That is powerful. If you start out with $10,000, it grows to $20,000 in 2.4 years, to $40,000 in 4.8 years and to $80,000 in 7.2 years. In less than ten years, your initial $10,000 investment explodes to $160,000.

And, if you are using your IRA money, all that profit is tax deferred . . . Now that is something worth thinking about.

About the Author:

j.p. vaughanJ. P. Vaughan was the co-founder and Publisher of Creative Real Estate Online. She wrote the book How to Buy Your Dream House for 1/2 Price (Quantum Publications 1994, out of print). J.P. was also an attorney who practiced law in Michigan until she started investing in real estate full time in 1988.

J.P. passed away in October 2015 after a long battle with ovarian cancer.


 

 

 
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