The concept of doubling your wealth has little meaning without a specific time frame. If you have any income-producing investments,they will eventually double your wealth without your having to do anything . But doubling your wealth within a target time period calls for some planning.
If invested capital remains constant, the return on investment needed to accomplish your goal can be figured by the rule of 72: Divide the number 72 by the number of years within which you aim to double your worth. The resulting number is the percentage you must earn on invested capital. Doubling in 10 years will require investments to yield 7.2% ; in five years, 14.4%; in two years,36%
To find out if your current investment portfolio is producing up to your expectations, do a careful review. Consider liquidating poorly performing investments and reinvesting the capital. A good rule of thumb in deciding whether to keep or sell an investment is: If I had the cash, would I make this investment now?
A good wealth-building portfolio is diversified and balanced. A good balance would be about one-third in stocks, one-third in income-producing real estate, One-third in other(which includes municipals, annuities and precious metals).
Regardless of how well balanced your portfolio is, your wealth will grow far more rapidly if you augment it with a regular and ongoing program of new investment. This will require some self-education in investment matters to help you work more effectively with your financial adviser. Careful investigation of each new asset prior to purchase reduces your risk. Emphasize updates, too: Regular review of your portfolio on at least an annual basis will give you a better
picture of how well your plan is working.
If invested capital remains constant, the return on investment needed to accomplish your goal can be figured by the rule of 72: Divide the number 72 by the number of years within which you aim to double your worth. The resulting number is the percentage you must earn on invested capital. Doubling in 10 years will require investments to yield 7.2% ; in five years, 14.4%; in two years,36%
To find out if your current investment portfolio is producing up to your expectations, do a careful review. Consider liquidating poorly performing investments and reinvesting the capital. A good rule of thumb in deciding whether to keep or sell an investment is: If I had the cash, would I make this investment now?
A good wealth-building portfolio is diversified and balanced. A good balance would be about one-third in stocks, one-third in income-producing real estate, One-third in other(which includes municipals, annuities and precious metals).
Regardless of how well balanced your portfolio is, your wealth will grow far more rapidly if you augment it with a regular and ongoing program of new investment. This will require some self-education in investment matters to help you work more effectively with your financial adviser. Careful investigation of each new asset prior to purchase reduces your risk. Emphasize updates, too: Regular review of your portfolio on at least an annual basis will give you a better
picture of how well your plan is working.
