Last week, one of my co-workers introduced us to a Financial planning adviser. The two of them represented a financial company that offers various investment products tailor-made to the client's needs.
The financial adviser gave a simple presentation which focused on personal finance and financial planning. He discussed the different financial products, as well as the investment habits of the typical Filipino (according to age group).
But one thing that got stuck to my mind was his reference to Albert Einstein's Rule of 72. The rule is to divide 72 by the interest rate you are receiving for a financial product. The number you get is the number of years it will take for investment to double. For example, investing 25,000 pesos with a 10% interest rate will take 7.2 years (72/10) for the money to become 50,000 pesos. This is the magic of compounded interest.
This shows that if you allocate more time you to an investment with a high interest rate, your money would grow faster. Simple as it might sound, there are other factors involved, such as inflation, taxes, and the type of investment you place your money.
1 comment:
i put some of my money on several cooperatives. its not earning much but i get access to a large amount when necessary.
ok ba ang cooperativas?
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