Rule of 72 Step 2 of 2: How many times will my money double?
This step teaches you how important it is for your money to double as many times as possible, and for your debts to double as few times as possible. Determine how many years you will keep your investment before cashing it in. Divide that by the number of years it will take to double each time, the number you figured out in step one. Now look at what happens to your money each time it doubles… $1 … $2 … $4 … $8 … $16 … $32 … $64 … $128 … You can see that it makes a big difference how many times your money doubles. If you can make it double only a few more times by making just slightly better investments, you can end up with many times more money at retirement, or whenever you cash in your investment. Think about how fast your debts can double with high interest rates, such as those charged on most credit card accounts. You have learned the basics you need to use the rule of 72. But we can still give you much more.
