When I spoke to a group of college freshmen yesterday, one of the  students asked me if a financial advisor was correct that if he invests  $1,000 at the age of 18, it would grow to $500,000 by the time he  retires.

I initially said, "no" the financial advisor was  incorrect. But then I decided to use the example to explain the rule of  72 that financial advisors use to make predictions on how much money an  individual could have for retirement.
 
So I turned to the  whiteboard behind me and found a marker and began to explain how  financial advisors use the rule of 72 to determine how many times your  money will double before you retire. I told the students that financial  advisors like to use 8 percent as the average interest your investments  will earn over time and how the 8 percent interest rate is divided into  72 to determine how many years it will take for your money to double.

I  wrote the equation 8 divided into 72 on the board and asked the  students what the solution is, which was 9. So that means every 9 years,  your money will double if your investments are averaging 8 percent  interest.

Then, I led the students in an exercise to test the  original financial advisor's theory that if one of them invested $1,000  at age 18, it would grow to $500,000 by retirement based on an 8%  interest rate.

See the exercise I took the students through to find out if  $1,000 can grow to $500,000 by retirement and also how a 24-year-old can  have a half million by only saving for 12 years on my blog, www.mytensense.com.