Tag Archive for: investing

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Use the Rule of 72 to Simplify Your Financial Decisions

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the rule of 72 a financial tool for BIGG Success

Today on The BIGG Success Show, we brought back one of our favorite bits – Terms from a Hat. This time we pulled out…The Rule of 72.

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The Rule of 72 is a quick way to determine how many years it takes to double your money. You simply divide the interest rate into 72 to get the number of years it will take to double your money. For example:

Let’s say you have an investment that earns 6%. 72 divided by 6% = 12 years. You’ll double your money in 12 years.

See how easy that is!

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The Banker Who Nearly Cost His Client a Fortune

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ford-assembly-lineHenry Ford had a friend named Alexander Malcomson. He convinced Ford to raise money and do it BIGG. Ford resisted at first before giving in.

Malcomson’s job was to peddle the stock. He asked his attorneys, John Anderson and Horace Rackham, to invest.

Anderson jumped at the chance. Rackham sought the advice of his banker, one of the most respected bankers in Detroit. Rackham explained the opportunity to the banker.

The banker pointed out the window of his office and said, ‘You see all those people on their bicycles riding along the boulevard? There is not as many as there were a year ago. The novelty is wearing off; they are losing interest. That’s just the way it will be with automobiles. People will get the fever; and later they will throw them away. My advice to you is not to buy the stock. You might make money for a year or two, but in the end you will lose everything you put in. The horse is here to stay, but the automobile is only a novelty – a fad.’

Rackham was convinced until he ran into Malcomson a few days later. Malcomson convinced him to take a flyer on the fledgling company. Rackham invested $5,000.

How did it turn out? Rackham eventually sold his stake for $12,500,000.

BIGG success comes to those who listen to the right advice.

Source: The Truth about Henry Ford by Sarah T. Bushnell

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The Magical Power of Compounding Your Time

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time_watchBIGG success is life on your own terms. There are five elements of BIGG success: money, time, growth, work and play. Money and time are our two resources.

Most people are familiar with the compounding power of money. For example: Assume you invest $100 a month in a plan that allows you to defer the taxes when you’re 35 years old. You plan to retire at 65 (30 years from now). If you earn a 6% return (conservative by historical standards), your retirement portfolio will be almost $102,000. Not bad on a total investment over the years of $36,000.

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A small amount of money, invested wisely over time, turns into a BIGG sum.

Time compounds like money

What about time? Does it compound? You may not have money to invest. But everyone has the same amount of time every day. Time is the great equalizer.

Time, our other resource, compounds similarly to money. If you invest time, over time, you can create BIGG success. It may come in the form of money or in some other form (e.g. a better life for you and your family).

Here’s the challenge:
If you invest your money in the wrong thing, you may lose all or part of it. Or you may not earn as much on it as you should.

The exact same principle applies to time. If you invest your time poorly, you won’t reach your full potential. You’ll miss opportunities. You must focus to reach BIGG success!

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The Best Investment You Can Make Now

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finance_mazeStocks are up significantly from their low in March of this year. Of course, they still haven’t clawed their way back to the level we saw in 2007. However, you have to ask yourself if stocks are the best place to put your money right now.

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Treasuries – bonds issued by our government – have also had quite a run as investors have fled to safety. If interest rates go down, the value of the underlying note goes up. Interest rates are incredibly low right now. How much lower can they go? Read more

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Entrepreneuring Your Personal Finances

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personal_financeBigg success is life on your own terms. You are the entrepreneur of your life. Entrepreneurs look at the world through a different lens than do large company CEOs.

For example, large companies and small companies use different financial models. Large companies generally have the ability to raise large amounts of money when they need it.

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For small companies, it’s much more difficult. So it’s more critical for small business owners to watch their cash flow. For us as individuals, our financial model is much closer to the entrepreneur’s.

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