Tips from Don, Sr. - "The Rule of 72"

"Since my earliest recollections as a three year old, my father has been collecting clippings and factoids in cataloged three-ring binders."

- Don West, Jr.

Tips from Don, Sr.
Tip No. 1 - "The Rule of 72"

Since this is the first post that I have mentioned my father, Donald Louis West, I., I thought it appropriate to give just a brief background of my role model number numero uno, HERE.

My Dad is what you would call a "walking talking wikipedia", for my readers that are not online, wikipedia is the Web 2.0 online encyclopedia that has replaced the traditional printed volumes due to its limitless capacity to catalog our fascinating and globally connected world. (You can read my post on Why I love Wikipedia HERE). So, back to my Dad... Dad always seeks to have one jewel or gem of extremely useful knowledge to share with you whenever you enter his presence. I say it that way because for the past 17 years I have lived away from home, so when I return for a visit my Dad has prepared a ritual that dates back to my days on active duty in the US Navy back in the early nineties.

My Dad's ritual is quite simple, it begins with an invitation to sit down for a movie - always a hand picked title, kinda like the best of since you were last here, or the most relevant. Then typically in a different conversation there is the page from one of the binders. Since I was a young child my father has collected tens of thousands of newspaper and magazine clippings, of various sizes and shapes and catalogs them scrapbook style, (see picture above). Now it are the pages from the binders that I have come to love. Why, you ask. Simply because it always starts with, are you familiar with...x,y,z. An no matter how hard you prepared during your journey, no matter how much you've read, you know the next words and the clippings on those pages are going to be way beyond the scope of your current radar capacity. (I have already set Dad's blog up for him HERE, but we will have to wait to see if he will ever join and begin to digitize his binder knowledge.)

The "Rule of 72" was one of the early pearls of wisdom shared by my Dad. So now, I share it with you....

The "Rule of 72"

[72 ÷ Interest Rate = Est. Time to Double $]

Most are familiar with the concept of compound interest. So the "Rule of 72" is a simple way to roughly estimate how long it will take to double your money at a given interest rate. For example, let's say you have an opportunity to earn 8% interest on your money. To use the rule of seventy-two to determine how long it would take to double your money at 8% interest you would dived the number 72 by 8:

[72 ÷ 8 = 9 Years ]

If you are really into the math, check out the Rule's Wikipedia page HERE

You can also apply the Rule of 114 to estimate tripling your money, and the Rule of 144 for quadruapling.