28 April 2008

The Rule of 72

Good news, Public Mutual will declare distributions (i.e. dividend) for two of its existing fund, Public Ittikal and Public Islamic Equity Fund (PIEF) on 31 May 08. So for those who invests before 31 May, you'll be automatically eligible to receive such income distributions. Last year distribution for these funds was 10 cents and 5 cents/unit respectively. So let's not wait and start invest now :) But remember, past performance is not an indication of future performance. Knowledge is still the KEY.

I'd like to share something for today.....

The Rule of 72
Divide 72 by the rate of return of any investment and the answer you get is the approximate number of years it takes for that investment to DOUBLE in value.
72 / Rate of Return = No. of years to DOUBLE money

For example, how many years you need to take to DOUBLE your RM100k if the interest rate is 10%?
72/10%=7.2 years

So, the answer is 7 years. That means you need to take 7 years to DOUBLE your RM100k to become RM200k if the interest rate is 10%.

You may replace 10% with the Tabung Haji/ASB/fixed deposit/etc rate accordingly into the formula.

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