How long until I double my investments?
The rule of 72 is an easy way to estimate how many years it will take to double your investments at a given rate of return, or allow you to estimate what percentage return you need over a specific period of time. It’s a lot easier than pulling out a calculator to do the compound interest formula. It works for annually compounded interest and estimating, as long as the percentage return is under 20%
Rule of 72 Example:
Hypothetical Rate of Return: 10%
72 divided by rate of return: 72/10 = Years to double investment: 7.2 years
| Rate of Return | 6% | 7% | 8% | 9% | 10% | 11% | 12% |
|---|---|---|---|---|---|---|---|
| Years to double money | 12 | 10.2 | 9 | 8 | 7.2 | 6.7 | 6 |
Set a time Goal to Double Your Investment
Example:
Years to Double Investment : 6
72 divided by years: 72/6 = Rate of Return to reach goal: 12%
| Age | 18 | 27 | 30 | 36 | 42 | 45 | 54 | 63 | 66 |
|---|---|---|---|---|---|---|---|---|---|
| 6% return | $200 | $400 | $800 | $1600 | $3200 | ||||
| 8% return | $200 | $400 | $800 | $1600 | $3200 | $6400 |
This is an easy way for you to review your investments to see if they are on track with your current investment strategy.
Are you on track?
If not, you may want to restructure your investments to capture an appropriate measure of expected investment returns based on your appetite for risk.
How do you do that? Contact us and we’ll be happy to provide a second opinion on your current investment strategy.
Schedule a free consult today.
The above rates of return are for illustrative purposes only and do not attempt to predict actual results of any particular investment.
