Similarly, if you want to double your money in five years, your investments will need to grow at around 14.4% per year (72/5). ... PPF at an annual interest rate of 7.1% will take around 10 years to double your money assuming the interest rate remains at 7.1% (72/7.1 =10.14).
According to Standard and Poor's, the average annualized return of the S&P index, which later became the S&P 500, from 1926 to 2020 was 10%. At 10%, you could double your initial investment every seven years (72 divided by 10).
This rule asserts that a properly diversified portfolio of stock funds and bond funds will likely last through retirement if you take out no more than 4% of its value every year.
The Rule of 72 is an easy way for an investor or advisor to approximate how long it will take an investment to double, based on its fixed annual rate of return. Simply divide 72 by the fixed rate of return, and you'll get a rough estimate of how long it will take for your portfolio to double in size.
After 10 years of adding the inflation-adjusted $1,000 a year, our hypothetical investor would have accumulated $16,187. Not enough to knock anybody's socks off. But after 20 years of this, the account would be worth $118,874.
Now let's look at some ideas on how to invest $10,000:
Doubling Your Money In 1 year
If you are an aggressive investor and wish to see your money double itself in a span of 1 year then according to the rule of 72, you need to invest in avenues that provide annualized returns ranging between 70% to 72% (72/72 = 1).
Here are some best 5 ways to double your money fast.
Top 10 Ways to Earn a 10% Rate of Return on Investment
Using the rule, you take the number 72 and divide it by this expected rate. For example, if you have a $10,000 investment that has earned or that you anticipate will earn an average of 10% every year, it would take 72/10 = 7.2 years for your money to double.
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