ROI Formula

Investment is one sure-shot process that can make you rich and will enable you to achieve your financial goals of life. The first step before you start your investment activity is to budget your expenses. You shall know the pattern of your spending. The items that makes you most greedy and items on which you have control.

Many investors seek to beat the market by following value or growth investment principles. Does an investor have to choose one approach, or can they be blended together to create an improved stock market portfolio strategy? To help people to learn to invest this is the first of several articles on value and growth investing.

Few of us are taught anything about of money when we are young, such as the magic of compound interest or the dangers of debt, so it is not surprising that investing is a mystery to most people. This is one reason there are so many dodgy spruikers offering “get rich quick schemes”, and why they do so well.

2008 has been a disappointment to say the least. The S&P 500 Index had annual return of negative 37% last year. As you might guess it was not one of my top three investments. I have taken large losses like most everyone else in stocks, mutual funds and bonds. My top three investments still remain the same.

There is an easy to remember investment formula called the rule of 72. It is an easy way to help you estimate how much time you will need in order to double your investment. For example, lets say that you need to double your money in 8 years. Divide 72 by 8 and you get 9. This means that you would need to earn 9% on your investment in order for the money to double in 8 years. The more money you start with, the more you will have earned, of course.