What if it only took you 5 seconds to figure out how long it would take to double your money? I’m here to tell you that there is a way. It’s called the Rule of 72. It is a simplified way to determine how long an investment will take to double, given a fixed rate of return. It’s how to quickly figure how long it will take to double your money.
For example, say a Wall Street advisor is telling you that he can get you a 4% annual return on your investment. So you would take 72 divided by 4 (=18) and that would tell you it would 18 years for your money to double.
Or let’s say you partner with some people on a real estate deal that gets you a 10% annual return. That means it would take approximately 7 years for your money to double (72/10 = 7.2).
Now that you know the 5 second way to calculate how good an investment is, the next question is what kind of investing opportunities do you currently pursue? Do you know what kind of returns you get on your investments?