In today’s Finance Minute, let’s talk about the magic of Compound Interest. Do you know how long would it take you to double your money? You can use the Rule of 72 to figure it out.
All you have to do is divide the interest rate into the number 72. For example, if you were getting 8% interest on your investment and you divide the number 72 by 8, you will get the number 9. This means it will take you 9 years to double your money at 8% interest.
In order for the Magic to work, is for you put the money away and never touch it! Because once you touch it, you lose the magic of compound interest. If you have kids and they start investing $250 per month now on their TFSA instead of gadgets and shoes, at 8% interest they will have over 1.2 million dollars when they retire! If you have kids, you should share this video with them. Yes, you told them about this already but as you know the same message delivered by somebody else on social media is better received by kids these days.
Thank you watching. Please like and share the magic of compound interest.