This column discusses how invested wealth can grow over time with compound interest. A person can calculate how long it would take for an investment to grow by using the rule of 72. Dividing 72 from the rate of return can reveal the number of years it will take for the initial investment to double. A higher rate of return will cause the investment to grow faster. The key is to encourage heirs to wait and not make an early withdrawal of the investment.
See Lon Jefferies, How to enrich your heirs, USA Today, June 8, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
