Let's Keep This Between Us

Shh! Don't tell anyone what I'm about to tell you. It's a long-kept secret among the financial fraternity and they’d kill me for telling you.

The Rule of 72.

There are a lot of different ways to use it, but the most common is as follows:

If you get a 10% annual return on your money, you will double your money in 7.2 years.

If you get a 7.2% return, your money will double in 10 years.

Getting a 3.6% return? Your money will double in 20 years.

For you math nerds the formula is:

72 / X% = years to double

It also works in reverse. If inflation is 3.6% annually, in 20 years your money will be worth half what it is today. Eek!

The math isn't exact, but surprisingly close.

But let's keep that between you and me.

DISCLAIMER:  This publication is for educational purposes only and should not be considered financial, tax or legal advice.  These statements have been simplified for illustration purposes.  Consult your financial planner or tax advisor for help with your specific situation.