The Simple Rule That Shows How Fast Your Money Doubles
Why every investor should know the Rule of 72
There’s a little-used metric that makes it easy to compare investment performance.
It’s called the Rule of 72 — and it’s so simple I once explained it to a 5-year-old. Yet it’s powerful enough to reshape how you evaluate opportunities and think about compounding.
How It Works
The math couldn’t be easier:
Take the number 72
Divide it by your annual interest rate (as a whole number, not a decimal)
The answer tells you how many years it takes your money to double
Example: If your investment earns 6% annually → 72 ÷ 6 = 12 years to double.
My personal goal? To find opportunities where money doubles every 3–5 years.
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Why This Matters for Investors
Compounding is sneaky. It works quietly in the background — multiplying your money (or your debt) much faster than you realize.
That’s why the Rule of 72 is so valuable:
It helps you compare investment opportunities quickly.
It shows how small rate differences make huge impacts over time.
It keeps you focused on the long game, where wealth is actually built.
Final Takeaway
The Rule of 72 won’t appear in a pitch deck, but it’s one of the simplest tools for cutting through the noise and keeping your eye on what really matters: time and compounding.
👉 What’s your personal rule of thumb for comparing investments? Reply and share your approach.
Jon
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