Do You Want To Double Your Money?

Finance Guru Speaks: Do you know there is a way to calculate the number of years required to double your invested money? 

When investors put their hard earned money, they always dream to get their money doubled and at a very fast pace. Nobody can time the market, and past performances of Equity investment returns in Stocks and Mutual funds may not be the same in the future. 

Historically over a long period of time, say 5-10 years, Equity has given around 12% return.

Double your Money - Rule of 72

So here comes the popular "Rule of 72", using which you can calculate how many years it will take to double your money based on an assumed rate of returns.

Double your Money - Rule of 72

Suppose you invest Rs. 50,000 in a top-rated Mutual fund and based on the past performances you assume the future rate of returns as 12% on your investment. Then you need to divide 72 by the Rate of returns to find the Years needed to double the money.

72 divided by 12 gives the result as 6. So based on Rule of 72, it will take 6 years to get your money doubled as Rs. 1 Lakh.

If you are lucky enough to get 18% annualized returns, then your money can get doubled in 4 Years. Higher the rate of returns, less is the no. of years to get your money doubled.

Rule of 72 looks like a small Maths equation, but in reality, it's an extremely useful thumb rule to plan out for investing.

Give a proper thought about your future goals and money to be invested, and you can make some good planning using this rule. 

Hope this article may give you a different perspective about Savings & Investing. Let us hear from you if this article helps!

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