The ‘Rule of 72’ is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.
By dividing 72 by the annual rate of return, you can know how many years it will take for your investment to double.
The rule of 72 with compound interest was great back when interest rates were higher.
But today you need a new vehicle that allows you to:
1. Protect your capital 2. Give you at least a 6-10% return 3. Gives you the possibility of appreciation in the future 4. Gives you tax advantages
The bank is for people who don’t trust in themselves. You need to be doubling your money quicker than what the banks will give you. The house is about protecting money, but it doesn’t give a return or a tax advantage.
Average rate in US banks is below .05% which means it would take you at least 144 years to double your money. Do the math. You can’t compound at the bank!
I’m seeing doubles in 3 years, 4 years, and 5 years investing in multi-family apartment buildings.
This is the new compound interest.
Don’t wait until you are 90 years old for your money to double!
The average return in my real estate holdings is north of 12% before appreciation. Without any appreciation money doubles in 8.3 years while protecting your capital.
Ignore your money and it will ignore you!
“The new compounder of the 21st Century is multifamily real estate” …but not just any apartment building.
Rents are going to go higher for class B for any other types of apartments.
There are 4 main types of properties:
Class A: $1,500 to $3,000 rents
Class B: $1,100 to $1,500 rents
Class C: $800 to $1,100 rents
Class D: $500 to $800 rents
You need to be in A or B in select markets. Don’t get started in C and D, that’s a management nightmare. Detroit will never be an A market. California will be C and D markets in future.
You can buy junk—or you can buy great property.
At Cardone Capital, we don’t do junk. We invest in quality properties that cash flow and wait for appreciation—and this is the compounder of the 21st century.