DIY Investing Rules, OK? The Rule of 70.
This is an excellent rule that helps you determine what your current wealth will be valued at, 10 or 20 years down the line.
Even if you do not spend, or invest, a single penny, it’s real worth – or buying power – will be much less than it is today.
The reason is inflation.
To calculate this, take the number 70, and divide it by the current inflation rate. The number that you arrive at, is the number of years before your wealth is worth half of what it is today.
For example, let’s suppose you have ten thousand pounds and the current inflation rate is 10%. By The rule of 70, your money will be worth just five thousand pounds in 7 years time. To calculate this, simply divide the number 70 by 10. Learn much more at DIY Investor.net
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