The rule of 72

Do you know the rule of 72?

If not, you should. The rule of 72 is simply put a way to calculate how long it will take for an investment to double.

Here is a fun exercise. Go into  your bank and look for an advertisement for the rate of return for CD investments. At my bank (that rhymes with Smells Largo) a 6 month CD returns a rate of 1% interest. According to the chart on Wikipedia ( http://en.wikipedia.org/wiki/Rule_of_72 ), it will take 72 years to double my money. Consider that if your parents invested $50,000 dollars on your behalf at 1%, by the time you were ready to retire you'd have doubled your money. In 1970 when I was born a beach side 2 bedroom house in California cost about $20,000. That same house today will cost a minimum of $2,000,000 dollars. In other words the return rate for an investment at 1% is so slow that you'll not only not get a good return, you'll lose money on the deal through inflation. So where should you invest your money? The stock market? Maybe, but thats far too much of a gamble. Consider that the Dow Jones and the Nasdaq are at roughly the same place they were 5 years ago... which is roughly the same place as it was in 2001. Some stocks have borne out well, but with the constant pressure from brokers to deversify and to buy and sell, most people end up losing money. The currency exchange is a great place to make a lot of money fast. George Soros actually put himself on the world scene by doing just that ( http://en.wikipedia.org/wiki/George_Soros#Currency_speculation ). The currency exchange is very technical, the learning curve is brutal, and at the end of the day if you don't really know what you're doing you'd be better off taking your savings to Las Vegas and betting everything on a single hand of 2 deck black jack with favorable rules. You probably don't want to do either of those things. So what else is there?

There is prosper. And online lending institution that you can borrow money from for any reason (based on your credit), or actually buy loans from AA credit rating people all the way down to hi risk loans. The return on investment percentage scales from low (6% on AA loans) to high (30%+ on HR or high risk loans).
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I personally use this service. Traditional banking is dead. Its time to join a credit union for checking accounts and use non-traditional investments. Feel free to contact me with questions. Checarsner@gmail.com