The secret to doubling your money is really no secret at all. To double your money, all you need is TIME!
How much time is needed to double your money?
There’s a simple formula we can use called the “Rule of 72”. Simply take the number 72, and divide it by your expected annual rate of return.
72 ÷ (annual rate of return) = (number of years to double your money)
As an example, let’s assume a 7.2% annual rate of return.
72 ÷ 7.2 = 10 years
In this case, with a 7.2% annual rate of return, money will double every 10 years.
Now, let’s look at another example of $250,000 invested with a 7.2% return, with no additional savings.
Today - $250K
In 10 years - $500K
In 20 years - $1M
In 30 years - $2M
With the investment doubling every 10 years, $250,000 becomes $2,000,000 after 30 years (assuming no additional savings).
Let’s look at that example again, but assuming a savings rate of $25,000 per year ($250,000 every 10 years).
Today - $250K
In 10 years - $500K + $250K (savings) = $750,000
In 20 years - $1.5M + $250K (savings) = $1.75M
In 30 years - $3.5M + $250K (savings) = $3.75M
Wow, that’s a great nest egg! But wait… we forgot about inflation.
To keep our math simple, let’s assume an inflation rate of 2.4% (which falls between the Bank of Canada’s target inflation rate of 1-3%). If we apply this to the “Rule of 72” (72 ÷ 2.4 = 30 years), this would mean that in 30 years the cost of your goods and services will also have doubled.
In our example above, at age 70, the $3.75M would carry the purchasing power of $1.88M in today’s dollars – not bad at all.
It is important to note that the “Rule of 72” examples above carry many assumptions. A comprehensive financial plan that incorporates tax minimization strategies, investment management, retirement planning, and estate planning is certainly more powerful and precise, and therefore highly recommended.
However, the “Rule of 72” can be particularly helpful with decisions on spending vs. investing, such as deciding whether or not to spend an extra $10K to get a model vehicle vs. investing it to have $80K in 30 years.
Now you know the secret on how to double your money. Spread the word!
Marc
* Rates are shown for illustration purposes only and are not a guarantee.
FAQs
There's actually a simple trick that allows you to quickly estimate when you can double your money. It's called the Rule of 72. The principle is simple. Divide 72 by the annual rate of return to figure how long it will take to double your money.
What is a guaranteed way to double your money? ›
The time-tested way to double your money over a reasonable amount of time is to invest in a solid, balanced portfolio that's diversified between blue-chip stocks and investment-grade bonds.
What is the magic number to double your money? ›
The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.
How to double $2000 dollars in 24 hours? ›
Try Flipping Things
Another way to double your $2,000 in 24 hours is by flipping items. This method involves buying items at a lower price and selling them for a profit. You can start by looking for items that are in high demand or have a high resale value. One popular option is to start a retail arbitrage business.
How to double $1,000? ›
One of the easiest ways to double $1,000 is to invest it in a 401(k) and get the employer match. For example, if your employer matches your contributions dollar for dollar, you'll get a $1,000 match on your $1,000 contribution.
How can I double $5000 quickly? ›
For a quick return on a $5,000 investment, consider options like stock trading, especially in high-growth sectors or investing in a diversified mutual fund. Short-term P2P lending can also be a way to see quicker returns, though it carries higher risk.
How to turn 100k into 1 million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years. There are a lot of great S&P 500 index funds.
What number attracts money? ›
Number 9 is associated with abundance, generosity, and humanitarian pursuits. It is believed that by sharing wealth and resources, individuals can attract more abundance into their lives.
What is the lucky number for money coming? ›
10/10Number 9
According to the number, you have the potential and ability to make a lot of money, but you must plan well and have the patience to put any ideas into action. Your courage and high level of energy will pay off. Every Tuesday, recite the Hanuman Chalisa to fight against negativity.
What is the lucky number in finances? ›
But when it comes to measuring money, the financially aware use lucky number 72 principally to calculate how long it will take to double their investments. 72 ÷ your compound annual interest rate = how many years until your investment doubles.
To potentially turn $10k into $100k, consider investments in established businesses, real estate, index funds, mutual funds, dividend stocks, or cryptocurrencies. High-risk, high-reward options like cryptocurrencies and peer-to-peer lending could accelerate returns but also carry greater risks.
How to double $5,000 quickly? ›
To turn $5,000 into more money, explore various investment avenues like the stock market, real estate or a high-yield savings account for lower-risk growth. Investing in a small business or startup could also provide significant returns if the business is successful.
What is the rule of 70 doubling money? ›
The rule of 70 is used to determine the number of years it takes for a variable to double by dividing the number 70 by the variable's growth rate. The rule of 70 is generally used to determine how long it would take for an investment to double given the annual rate of return.
