The Rule of 72
Do you know the Rule of 72?
The Rule of 72 calculates just how long it's going to take for your money to double.
Just take the number 72 and divide it by the interest rate you hope to earn. That number gives you the approximate number of years it will take for your investment to double.
As you can see, a one-time contribution of $10,000 doubles six more times at a 12 percent return than at 3 percent.
How many doubling periods do you have in your life?
It's not likely that an investment would grow by 10% or greater on a consistent basis given today's market conditions.
This table serves as a demonstration of how the Rule of 72 concept works from a mathematical standpoint.
It is not intended to represent an investment. This chart does not include fees or taxes, which would lower performance. This chart uses constant rates of return, unlike actual investments which will fluctuate in value.
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