Millionaires keep their money always moving. This is one of the reasons why rich people become richer. Your money should be like a hunter leopard. It will help you find a deer, catch the deer quickly and then goes out and gets you another deer. However, the mediocre people’s money acts like the deer that just flies away. If you want to become a millionaire quickly, it is very important that your money should be like a hunter leopard, going out every day and bringing home more and more assets.
Momentum of money means you want your money back as quickly as possible so it can be reinvested to acquire other assets. Today, many financial planners advocate the investors by saying, “Just give us your money, and we will make your money to work for you.” Most investors follow the principle, “Invest for the long term.” They buy and hold and diversify. But in reality, they park their money and go back to work hard for money.
Mediocre investors have no interest in learning how to put their money to work. As a result, they freeze their money in a savings account or in their retirement account. And they continue working harder than their money. They work with the hope that their money is also working. But when a financial disaster comes along, their parked money gets wiped out.
On the other hand, millionaires investors do not park their money in a saving account. Because they know that they have to keep their money working hard to acquire more and more assets. Once their money acquires an asset, that money is soon reemployed like a hunter leopard to go out and get them another asset like deer. The key principle they use to keep their money in motion and acquire more and more assets is something that almost anyone can do to become rich.
Let one of the proven formulas that can help you quantify the momentum of your money.
The Rule of 72
You can measure the momentum of money by different methods. The “Rule of 72” is also one of the methods to measure the momentum of money. This rule is simply dividing the number 72 by the interest or the percentage of gain in value to give the relative speed at which your money will double.
|Time taken for doubling your money = 72 /Rate of interest|
For example, if you receive 10-percent interest on your savings, your money will double in (72/10 =) 7.2 years. If your stock is appreciating in value by 5 percent per year, it will take(72/5 =) 14.4 years to double your money. If it appreciates by 20 percent per year, then it will take (72/20 =) 3.6 years to double in value.
With the Rule of 72 in mind, it’s easy to see how investing can be a quicker road to building up your savings than simply putting money into a no-interest or low-interest earning savings account. It’s important to consider the potential fluctuations in the financial market, which can work for or against you depending on the market conditions. Still, the Rule of 72 gives you a general average.
However, there is a flip-side to this rule and all such money-making formulas that you will learn in the program. So, stay tuned.