Principles for Increasing the Money. It is probably every investor’s dream: to double your start-up capital in a short time. First of all, this goal doesn’t sound tangible. How much interest per year would an investor have to collect and how long would the money invest in doubling that amount? 15, 20, 30 per cent? 5, 10, 25 years?
With an investment period of 10 years, it would be “only” 7.2% interest per year, which would lead to the fact that your assets would double. Because the effect of compound interest, which increases the amount of money invested exponentially, should not be underestimated.
How do you calculate these numbers?
There is a simple, quick formula for this: the rule of 72. This can answer the question of how many years the start-up capital invested, which is invested at a certain fixed interest rate, doubles. The prerequisite for this is, the saver does not withdraw the inflow from the interest and use it for other purposes:
Number of years =
This allows you to calculate, for example, when € 10,000 will become € 20,000 through interest and compound interest. If we set an annual interest rate of 10%, all we have to do is divide 72 by 10.
= 7.2 Years
If on the other side, you only put your money in a savings account, which currently has around 0.05% interest annually, the whole story will last an incredible 1,440 years.
Conversely, with the help of the 72 rule, it is possible to determine the interest rate that is necessary to double your starting capital within a specific time:
Interest rate =
These Investments Jeopardize The Desire To Double
If you would like to double your cash as quickly as possible, the slogan is: Stay away from low-interest rates. To this end, for example, investors no longer need to expect much from secure government bonds. Daily and fixed deposits cannot be used either. However, savings have always been focused on the mentioned vehicles because these asset classes offer security.
Rethinking for more awareness of returns is slowly taking place: Gradually, more investors are investing in stocks that offer more risk and also higher interest rates.
Anyone planning to double their money should also be aware that in times of zero interest rates, this cannot happen with traditionally safe investments.
Take Advantage Of Price Fluctuations
One of the most obvious options for investors who want to invest their money in the stock market and double it up is to take advantage of price fluctuations. The short-term variant is called day trading. The so-called day traders earn money by buying shares at a specific price and selling them again with smaller profits.
That is why they often sell paper after a few hours, provided that a profit can be made with it. With such a strategy, the credit can be increased significantly in a short period of time. At the same time, you can also gamble away a lot. To be successful in this profession, you have to have a lucky hand and in-depth knowledge of the mechanisms of stock market trading. Very few day traders make a profit over long periods.
A long-term strategy is safer because the price fluctuations can then settle and also less time-consuming, as you don’t have to sit in front of your PC for hours every day and watch the price development. But this strategy also requires a skilled analysis of the markets and foresight. High yield bonds, CFD (Contract for Difference) trading or binary options are suitable for ambitious goals. However, these investments are highly risky and challenging to understand for laypeople. Regular stocks or bonds also generate high returns.
Besides, you don’t necessarily have to go public. As an investor, you can also collect high interest in other places, which support the doubling target.
Principles for Increasing the Money.