Risk and return are two important concepts to understand when it comes to investing. Different types of investments have different levels of risk and return, and investors should choose options that match their goals and risk tolerance.
Log in Leon-Art a year agoPosted a year ago. Direct link to Leon-Art's post “Why is it 72 specifically...” Why is it 72 specifically and not any other number? • (9 votes) Chase Carnaroli a year agoPosted a year ago. Direct link to Chase Carnaroli's post “I asked Khanmigo and this...” I asked Khanmigo and this was the response that I got: """ The actual formula for the time it takes to double an investment is: This makes time to double approximately Now remember that interest rates are a decimal (8% -> 0.08). In this example, the time to double would be That's not easy to calculate in your head though! To simplify it, let's multiple the top and bottom by 100. This is a little better but 69.3 is not easy to divide. We'll round up to 72 because that is a much easier number to divide by. So finally we are left with Although not exact, this approximation is usually good enough to determine how long it will take for your investment to double. (17 votes) Izzy 9 months agoPosted 9 months ago. Direct link to Izzy's post “_Dear Fellow Students, ...” Dear Fellow Students, After I watched the video, I scoured the internet about Penny Stocks (I'm a curious 15-year-old... can you blame me?). I saw a chart with different company statistics on it, read into it, and it looked pretty cool. However, while in the midst of my imaginary hunt for something I couldn't quite name, I found something intriguing... I saw that a man named Warren Buffet and his accomplice had gotten in trouble with the Federal government for manipulating the price of penny stocks. My question is How Exactly?? I think that paying more than the average $5 per stock would benefit the business. So can someone please explain this to me? Lots of thanks • (10 votes) connor 10 months agoPosted 10 months ago. Direct link to connor's post “SHould I invest in roblox...” SHould I invest in roblox stock • (6 votes) David Alexander 10 months agoPosted 10 months ago. Direct link to David Alexander's post “Have you checked with you...” Have you checked with your broker? She may be able to check for you on that particular stock and tell you if it's a good idea. (3 votes) Ethan a year agoPosted a year ago. Direct link to Ethan's post “If penny stocks are high ...” If penny stocks are high risk, does that mean the relative loss is risky? Since they trade at low prices, you wouldn't lose too much if they fail, but will gain a lot if they succeed, why is this considered "high risk"? Is it the idea that what you put in will likely disappear, even though they aren't particularly expensive? • (3 votes) Tanner Higham 3 months agoPosted 3 months ago. Direct link to Tanner Higham's post “I believe they are consid...” I believe they are considered high risk because for a set amount of money invested, you could lose much more. Investing less money will mean you won't be able to lose as much. (2 votes) Jake 7 months agoPosted 7 months ago. Direct link to Jake's post “At what age should I begi...” At what age should I begin investing in these financial markets (stocks, bonds, mutual funds, etc.)? Is there a strategy for a "beginner" investor? Are there investments that are better (and less riskier) than in financial markets? • (1 vote) David Alexander 7 months agoPosted 7 months ago. Direct link to David Alexander's post “I'm assuming that you are...” I'm assuming that you are not yet 18 years old, and legally able to invest in your own name. So, either get a trust account where your parents control things for you, or just wait. Whatever your age might be, don't begin investing until you have saved the necessary emergency fund. Even if you are legally entitled to invest, as a "beginner" you should rely on an advisor, who will charge you some money for the advice, but will help you avoid losing the money based on your own inexperience. (5 votes) Preston Howard III 10 months agoPosted 10 months ago. Direct link to Preston Howard III's post “Can you make a lot of mon...” Can you make a lot of money in just one year instead of getting $1,000 every 9 years • (1 vote) David Alexander 10 months agoPosted 10 months ago. Direct link to David Alexander's post “Investments can make a lo...” Investments can make a lot more than that when done wisely. BUT, investments can also lose it all. So don't be greedy, and understand the risks you are taking. (4 votes) Liang 3 months agoPosted 3 months ago. Direct link to Liang's post “If the index fund company...” If the index fund company that you bought the index fund from goes bust, can you possibly get some percentage of your money back? If so, at what percentage roughly? thx. • (1 vote) David Alexander 3 months agoPosted 3 months ago. Direct link to David Alexander's post “Investment involves the r...” Investment involves the risk of loss. You put your money there, hoping that it would increase, but you bet on the wrong fund. That investment is gone. (4 votes) lol 6 months agoPosted 6 months ago. Direct link to lol's post “What is index funds and p...” What is index funds and penny stocks? • (2 votes) Harry Tran 20 days agoPosted 20 days ago. Direct link to Harry Tran's post “For example, let’s say yo...” For example, let’s say you put your money into the S&P 500. Your money will be diversified into the top 500 companies in the US, and hopefully your money will grow over time. That’s called index funds. Meanwhile, penny stocks are companies whose share price is lower than $5 per share. (1 vote) JamesB 10 months agoPosted 10 months ago. Direct link to JamesB's post “Should I invest now?” Should I invest now? • (1 vote) David Alexander 10 months agoPosted 10 months ago. Direct link to David Alexander's post “You haven't said when "no...” You haven't said when "now" is. Are you 13 or 31? The answer will be different depending on your "now". (1 vote) CeciliaQ 10 months agoPosted 10 months ago. Direct link to CeciliaQ's post “Why is it 72 specifically...” Why is it 72 specifically and not any other number? • (1 vote) David Alexander 10 months agoPosted 10 months ago. Direct link to David Alexander's post “Actuarial science may hav...” Actuarial science may have the answer to that. I'm not an actuary, though. (1 vote)Want to join the conversation?
The Rule of 72 is an approximation that comes from the formula for exponential growth.
Time to double = ln(2) / ln(1 + interest rate)ln(2) is approximately equal to 0.693.
For small interest rates, ln(1 + interest rate) is approximately equal to the interest rate itself.
"""0.693 / interest rate. 0.693 / 0.08. 69.3 / 872 / 8 = 9.
- Izzy <3
