Remember how yesterday how I told you the rule of 72 was powerful. Well just like the rule can help you build wealth, with your credit cards and other debts it can work against you in the same manner. For instance I have a student credit card that has a 17% interest rate, using the same formula how long will it take for the balance on my credit card to double if I do not pay it off? 72/17=4.24 years. Therefore, if you are trying to save money and you get less of a return from your savings than you have to pay on you credit card it cancels out the possible gains. In addition to that, did you know with a thirty year fixed mortgage due to the rule of 72 you will typically pay 1.5 to 2 times the principle you took out in interest over thirty years.
Make sure you are present for the next few lessons we are about to get into the juicy details of building wealth. I am excited, are you?
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