The Rule of 72

Save money. Double time.

Do you know The Rule of 72? It's an easy way to calculate just how long it's going to take for your money to double.

To calculate, take the number 72 and divide it by the rate of return you hope to earn. That number gives you the approximate number of years it will take for your money to double.

Calculate How Long it will take for your money to double.
Rate of Return Years for Your Money to Double
72 ÷ =
How many doubling periods do you have in your lifetime?

Based on The Rule of 72, a one-time contribution of $10,000 doubles six more times at 12 percent than at 3 percent over 48 years. Combined with time, you can see why rate of return is key.

Years 3% 6% 12%
0 $10,000 $10,000 $10,000
6 $20,000
12 $20,000 $40,000
18 $80,000
24 $20,000 $40,000 $160,000
30 $320,000
36 $80,000 $640,000
42 $1,280,000
48 $40,000 $160,000 $2,560,000

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. The chart uses constant rates of return, unlike many types of investments which will fluctuate in value. It does not include fees or taxes, which would lower performance. It is unlikely that an investment would grow 10% or more on a consistent basis.

Want to learn More about How Money Works™? Check out these other financial concepts.

Debt Stacking

Debt
Stacking

The Theory of Decreasing Responsibility

The Theory
of Decreasing
Responsibility

Become an Owner, Not a Loaner

Become
an Owner,
Not a Loaner

Dollar Cost Averaging

Dollar
Cost
Averaging