Women’s History Month: Is Your Money Working for You?

Business

By Pamela Kuma

The acknowledgement and celebrating of women was not socially accepted until 1978, when the month of March was declared “Women’s History Month”.  As most of us can pretty much tell, we have evolved as women.  If History serves our memories well, not too long ago women were not allowed to vote, express themselves publically much less be the decision-maker whether at home or at work.  This has changed and continues to change.  With more women in power and steering the wheel in education, corporate America, family life, and globally, one can only reflect and be amazed at our growth.As we blaze a new trail, here are a few facts about how much women have impacted and continue to impact socioeconomically.

Facts:

Key Facts about Women-Owned Businesses

With all the trailblazing being set by women, the need is still there to manage our daily and/or business finances.  How do I get my three kids through college, setup an emergency fund, diversify my portfolio, and preserve my estate if something happens to me?  These and many more questions run through our minds and it can become overwhelming.

The Rule of 72

The Rule of 72, which was coined by Albert Einstein, is a decisive way of establishing your money to work for you. This is how the rule works: Wherever you put your money, divide  the number 72 by the interest rate generated annually, the number you come up with is the amount of years it will take for your money to double.  Example, a 29 year old female has $10,000 saved at an interest rate of 4% (which bank is giving that interest rate right now?) your money will double every 18 years.  Now imagine if your money was earning 12% (no banks will offer 12%…at least not in our life time), divide 12 by 72 and that will be 6, which means now, every 6 years your money doubles.  This is a phenomenal concept and when applied properly, has the potential to create compounding interest (interest is added to the principal).  The question then becomes, where can we put our money to earn such interest rates? Various investment vehicles may potentially provide such high interest rates. Check out the chart below to see how you can make The Rule work for you:

Just so you know, The Rule of 72 works for you as described above, however, it also works against you. How?  When you are in credit card debt.  The credit card companies use the same concept except they use your money with very high interest rates to make a profit.  Divide 72 by those interest rates and the number you come up with determines how often the amount you owe them will double.

Is The Rule of 72 working for you or against you?

Next Month: How is your savings impactd by taxes.

Let us know at www.twitter.com/hwmag/business

Ms. Pamela Kuma joined World Financial Group in 2008 as one of the company’s 16,000 licensed agents in the U.S. and Canada, focused on serving the insurance and financial services needs of everyday families often overlooked by the financial services industry. She looks forward to bringing necessary financial services and education to her local community.  Kuma originates from West Africa, Ghana and in 1994 took resident in Harlem, NY.  She attended Pace University and New York Instititute of Technology both based in New York. www.pamelakuma.com