Imagine being able to calculate, in just seconds, exactly how long it will take your money to double, without a calculator, spreadsheet, or finance degree. Sounds too good to be true? It’s not. This mental math trick has been helping investors make smarter decisions for centuries, and it’s so simple that anyone can master it in the time it takes to read this sentence.
Whether you’re just starting your investing journey or looking to sharpen your financial decision-making skills, the Rule of 72 is one of those rare tools that’s both incredibly powerful and delightfully simple. Let’s dive into this financial shortcut that could transform how you think about your money’s growth potential.
TL;DR (Key Takeaway) Summary
- The Rule of 72 is a simple formula that estimates how long it takes for an investment to double by dividing 72 by the annual rate of return
- It works remarkably well for interest rates between 6% and 10%, providing quick mental math estimates within seconds
- Investors use the Rule of 72 to compare investment opportunities, understand compound interest impact, and make faster financial decisions
- The formula is: Years to Double = 72 ÷ Annual Rate of Return (e.g., at 8% return, money doubles in approximately 9 years)
- While not perfectly precise, it’s accurate enough for most planning purposes and helps visualize the power of compound growth
What Is the Rule of 72?
In simple terms, the Rule of 72 is a mathematical shortcut that helps you estimate how many years it will take for your investment to double in value.
The formula for the Rule of 72 is refreshingly straightforward:
Years to Double = 72 ÷ Annual Rate of Return
That’s it. No complicated equations, no financial calculators required. Just divide 72 by your expected annual return percentage, and you’ll get a close approximation of how long it’ll take your money to double.
For example, if you’re earning an 8% annual return on your investment, simply divide 72 by 8, which equals 9. This means your investment will approximately double in 9 years.
Why Does This Matter?
Understanding the doubling time of your investments helps you:
- Set realistic financial goals based on actual growth timelines
- Compare different investment opportunities at a glance
- Appreciate the power of compound interest in a tangible way
- Make informed decisions about where to allocate your money
- Plan for major life expenses like retirement, education, or home purchases
The Rule of 72 transforms abstract percentage returns into concrete timeframes that our brains can actually grasp. Instead of thinking “I’m getting a 6% return,” you can think “My money will double in 12 years.”
The Mathematical Foundation Behind the Rule of 72
While you don’t need to understand the math to use the Rule of 72, knowing where it comes from can deepen your appreciation for this elegant formula.
The rule is derived from the compound interest formula:
Future Value = Present Value × (1 + r)^t
Where:
- r = interest rate (as a decimal)
- t = time in years
To find the doubling time, we set Future Value equal to 2 × Present Value and solve for t. Through logarithmic manipulation, we get:
t = ln(2) / ln(1 + r)
The natural logarithm of 2 is approximately 0.693. When we multiply by 100 to convert the decimal rate to a percentage, we get 69.3. However, 72 is used instead because it has more divisors (1, 2, 3, 4, 6, 8, 9, 12, 18, 24, 36, 72), making mental math much easier.
Variations of the Rule
Some financial experts use slightly different numbers depending on the situation:
- Rule of 69.3: Most mathematically accurate
- Rule of 70: Easier for mental math, good for continuous compounding
- Rule of 72: Best balance of accuracy and divisibility
- Rule of 73: Slightly more accurate for higher interest rates (above 10%)
For most practical investing purposes, the Rule of 72 strikes the perfect balance between accuracy and usability.
How to Use the Rule of 72: Step-by-Step Examples
Let’s walk through several real-world scenarios to see the Rule of 72 in action.
Example 1: Stock Market Returns
The stock market has historically returned about 10% annually over long periods. How long would it take to double your money?
72 ÷ 10 = 7.2 years
At a 10% annual return, your investment would approximately double in just over 7 years. This is why understanding why the stock market goes up over time is so crucial for long-term wealth building.
Example 2: High-Yield Savings Account
Suppose you have a high-yield savings account earning 4% annually. How long until your savings double?
72 ÷ 4 = 18 years
At 4%, it would take 18 years for your money to double, significantly longer than stock market returns.
Example 3: Dividend Investing
If you’re pursuing dividend investing strategies and achieving a 6% annual return through a combination of dividend yield and stock appreciation:
72 ÷ 6 = 12 years
Your dividend portfolio would double in approximately 12 years.
Example 4: Aggressive Growth Portfolio
An aggressive investor targeting 12% annual returns (higher risk, higher potential reward):
72 ÷ 12 = 6 years
The money would double in just 6 years—but remember, higher returns typically come with higher risk.
Comparison Table: Doubling Times at Different Returns
| Annual Return | Years to Double | Investment Type Example |
|---|---|---|
| 2% | 36 years | Conservative bonds |
| 4% | 18 years | High-yield savings |
| 6% | 12 years | Balanced portfolio |
| 8% | 9 years | Diversified stocks |
| 10% | 7.2 years | S&P 500 historical average |
| 12% | 6 years | Aggressive growth stocks |
| 15% | 4.8 years | Very aggressive/risk |
📊 Rule of 72 Calculator
The Power of Compound Interest: Why the Rule of 72 Matters
The Rule of 72 isn’t just a mathematical curiosity; it’s a window into understanding one of the most powerful forces in finance: compound interest.
Albert Einstein allegedly called compound interest “the eighth wonder of the world,” saying, “He who understands it, earns it; he who doesn’t, pays it.” While the attribution is debated, the wisdom is undeniable.
A Real-World Story: The Tale of Two Investors
Meet Sarah and Mike, both 25 years old with similar incomes. Sarah starts investing $5,000 per year into a diversified portfolio earning 10% annually. Mike waits until he’s 35 to start investing the same amount at the same rate.
Using the Rule of 72:
- At 10% return, money doubles every 7.2 years
By age 65:
- Sarah’s money has doubled approximately 5.5 times (40 years ÷ 7.2)
- Mike’s money has doubled approximately 4.2 times (30 years ÷ 7.2)
That one doubling period makes an enormous difference. Sarah ends up with significantly more wealth—not because she invested more total dollars, but because she gave compound interest more time to work its magic.
This illustrates why making smart financial moves early in life can have such dramatic long-term impacts.
Multiple Doublings Create Exponential Growth
Here’s what’s truly remarkable: each doubling builds on the previous one.
Starting with $10,000 at 9% (doubling every 8 years):
- After 8 years: $20,000 (1 doubling)
- After 16 years: $40,000 (2 doublings)
- After 24 years: $80,000 (3 doublings)
- After 32 years: $160,000 (4 doublings)
- After 40 years: $320,000 (5 doublings)
Notice how the absolute dollar gains get larger with each doubling period. The jump from $160,000 to $320,000 is far more impressive than the initial jump from $10,000 to $20,000—yet both represent the same percentage increase.
Advantages and Limitations of the Rule of 72
Like any financial tool, the Rule of 72 has both strengths and weaknesses. Understanding both helps you use it appropriately.
Advantages
1. Speed and Simplicity
You can perform the calculation in your head within seconds, making it perfect for quick comparisons and on-the-spot financial decisions.
2. No Tools Required
Unlike precise compound interest calculations that need calculators or spreadsheets, the Rule of 72 works anywhere, anytime.
3. Intuitive Understanding
Converting abstract percentages into concrete timeframes makes investment returns more tangible and easier to grasp.
4. Effective Teaching Tool
The rule helps beginners understand the relationship between return rates and growth timelines, building financial literacy.
5. Universally Applicable
It works for any type of growth: investments, inflation, debt, population growth, or any exponentially growing quantity.
6. Reasonably Accurate
For rates between 6% and 10%—the range most relevant to long-term investing—investing-the Rule of 72 is remarkably precise.
Limitations
1. Less Accurate at Extreme Rates
The rule becomes less precise for very low rates (below 4%) or very high rates (above 12%). For these cases, the Rule of 69.3 or actual compound interest formulas are better.
2. Assumes Constant Returns
Real investments don’t grow at perfectly steady rates. The cycle of market emotions means actual returns fluctuate significantly year to year.
3. Doesn’t Account for Additional Contributions
The rule calculates doubling time for a single lump sum. If you’re making regular contributions (like monthly investments), the actual timeline will be different.
4. Ignores Taxes and Fees
The Rule of 72 uses gross returns. In reality, taxes, management fees, and transaction costs will reduce your actual returns.
5. Approximation, Not Precision
While close enough for planning purposes, the rule shouldn’t replace detailed calculations for critical financial decisions.
6. Can Oversimplify Risk
Two investments with the same average return might have very different risk profiles. The Rule of 72 doesn’t capture this nuance.
Rule of 72 vs Actual Compound Interest: Accuracy Comparison
How accurate is the Rule of 72 compared to the precise compound interest formula? Let’s examine the differences.
Accuracy Table
| Rate | Rule of 72 | Actual Time | Difference |
|---|---|---|---|
| 1% | 72 years | 69.7 years | +2.3 years |
| 3% | 24 years | 23.4 years | +0.6 years |
| 6% | 12 years | 11.9 years | +0.1 years |
| 8% | 9 years | 9.0 years | 0.0 years |
| 10% | 7.2 years | 7.3 years | -0.1 years |
| 12% | 6 years | 6.1 years | -0.1 years |
| 15% | 4.8 years | 5.0 years | -0.2 years |
| 20% | 3.6 years | 3.8 years | -0.2 years |
As you can see, the Rule of 72 is remarkably accurate for rates between 6% and 10%—exactly the range most relevant for long-term stock market investing.
When to Use More Precise Calculations
Consider using the exact compound interest formula when:
- Making major financial decisions (retirement planning, large purchases)
- Dealing with very high or very low interest rates
- Calculating returns with regular contributions
- Accounting for taxes, fees, and other costs
- Needing precision for professional or legal purposes
For everyday comparisons and rough estimates, the Rule of 72 is perfectly adequate and much more convenient.
How Investors Use the Rule of 72 in Practice
The Rule of 72 isn’t just theoretical; it’s a practical tool that smart investors use regularly. Here’s how:
1. Comparing Investment Opportunities
When evaluating different investment options, the Rule of 72 provides instant comparisons:
- Option A: 6% return → doubles in 12 years
- Option B: 9% return → doubles in 8 years
- Option C: 12% return → doubles in 6 years
This quick visualization helps you understand the real-world impact of seemingly small differences in return rates.
2. Setting Realistic Goals
If you want to turn $50,000 into $100,000, the Rule of 72 tells you what return you need based on your timeline:
- Want it in 6 years? You need 12% annual returns
- Want it in 10 years? You need 7.2% annual returns
- Want it in 15 years? You need 4.8% annual returns
This helps align your investment strategy with your goals and risk tolerance.
3. Understanding Inflation’s Impact
The Rule of 72 works for negative effects, too. If inflation runs at 3% annually:
72 ÷ 3 = 24 years
Your purchasing power will be cut in half every 24 years if you’re not earning returns that exceed inflation. This underscores why keeping all your money in cash is actually risky over the long term.
4. Evaluating High-Dividend Stocks
When researching high-dividend stocks, the Rule of 72 helps you visualize total return potential. If a stock offers a 4% dividend yield plus 5% annual price appreciation (9% total return):
72 ÷ 9 = 8 years to double
This helps you decide if the investment aligns with your timeline and goals.
5. Planning for Major Life Goals
Whether you’re saving for a down payment, college education, or retirement, the Rule of 72 helps you work backward from your goal:
- Need $200,000 in 20 years and have $50,000 now?
- That’s two doublings (50k → 100k → 200k)
- Two doublings in 20 years = 10 years per doubling
- 72 ÷ 10 = 7.2% return needed
Now you know what kind of returns your investment strategy needs to generate.
Common Mistakes When Using the Rule of 72
Even with such a simple formula, people make mistakes. Here are the most common pitfalls and how to avoid them:
1: Confusing Decimal and Percentage
Wrong: 72 ÷ 0.08 = 900 years (using 8% as 0.08)
Right: 72 ÷ 8 = 9 years (using 8% as 8)
Always use the percentage number directly, not the decimal equivalent.
2: Ignoring Volatility
The Rule of 72 assumes steady, consistent returns. Real markets fluctuate. An investment that averages 10% annually might experience years of +30% and -10%. This volatility affects actual outcomes.
Understanding why people lose money in the stock market helps you appreciate that average returns and actual investor returns can differ significantly.
3: Forgetting About Taxes
If you’re earning 8% in a taxable account but paying 25% in taxes, your after-tax return is only 6%. Use the after-tax rate for more realistic planning:
72 ÷ 6 = 12 years (not 9 years)
4: Not Adjusting for Fees
A fund with 8% gross returns but 1.5% in annual fees actually delivers 6.5% net returns:
72 ÷ 6.5 = 11.1 years (not 9 years)
Over the decades, this difference is substantial.
5: Applying It to Regular Contributions
The Rule of 72 calculates doubling time for a lump sum. If you’re making regular monthly contributions, you need different formulas. The doubling concept doesn’t apply the same way to dollar-cost averaging scenarios.
6: Overlooking Inflation
Nominal returns don’t tell the whole story. If you’re earning 7% but inflation is 3%, your real return is only 4%:
72 ÷ 4 = 18 years to double in purchasing power
Always consider inflation-adjusted returns for long-term planning.
7: Extrapolating Past Performance
Just because an investment returned 12% historically doesn’t guarantee future 12% returns. The Rule of 72 is only as good as your return estimate.
Advanced Applications: Beyond Basic Doubling Time
Once you’ve mastered the basics, you can use the Rule of 72 in more sophisticated ways.
Calculating Tripling Time
Want to know when your investment will triple? Use 115 instead of 72:
Years to Triple = 115 ÷ Annual Return
At 10% return: 115 ÷ 10 = 11.5 years to triple
Calculating Quadrupling Time
For quadrupling (4x your money), use 144:
Years to Quadruple = 144 ÷ Annual Return
At 10% return: 144 ÷ 10 = 14.4 years to quadruple
Reverse Engineering Required Returns
If you know your timeframe and goal, solve for the needed return:
Required Return = 72 ÷ Target Years
Want to double your money in 5 years? 72 ÷ 5 = 14.4% return needed
Understanding Debt Accumulation
The Rule of 72 works for debt, too. Credit card debt at 18% APR:
72 ÷ 18 = 4 years
Your debt doubles every 4 years if you only pay the minimum. This illustrates why high-interest debt is so dangerous.
Evaluating Real Estate Appreciation
If property values in your area appreciate at 5% annually:
72 ÷ 5 = 14.4 years
Home values double approximately every 14-15 years, which helps with long-term real estate planning.
Teaching the Rule of 72 to Others (Including Kids)
One of the best uses of the Rule of 72 is as an educational tool. Its simplicity makes it perfect for teaching financial concepts to beginners and children.
Making It Relatable for Kids
When teaching children about money, the Rule of 72 makes abstract concepts concrete:
“If you save $100 and earn 9% interest, you’ll have $200 in 8 years—that’s by the time you’re in high school!”
This tangible timeframe is much more meaningful than saying “you’ll earn compound interest.”
For parents looking to build long-term wealth for their children, understanding these principles is crucial. Check out strategies for how to make your kid a millionaire using the power of time and compound growth.
Fun Activities with the Rule of 72
Activity 1: The Doubling Game
Give kids a hypothetical $10 and different return scenarios. Have them calculate how many times their money would double by retirement age.
Activity 2: Inflation Detective
Look up historical inflation rates and calculate how long it took for prices to double. Compare prices of items from decades ago to today.
Activity 3: Investment Comparison
Present three different investment options with different returns. Have them calculate and compare doubling times to determine which grows fastest.
Rule of 72 in Different Investment Contexts
Let’s explore how the Rule of 72 applies across various investment vehicles and strategies.
Stocks and Equity Investments
The historical average stock market return is approximately 10% annually (before inflation). Using the Rule of 72:
72 ÷ 10 = 7.2 years
This explains why long-term stock investors who stay invested through market cycles tend to build substantial wealth—their money doubles every 7-8 years on average.
Bonds and Fixed Income
Conservative bond portfolios might return 4-5% annually:
72 ÷ 4 = 18 years
The longer doubling time reflects lower risk but also lower growth potential.
Real Estate Investment Trusts (REITs)
REITs historically return 8-12% through rental income and property appreciation:
72 ÷ 10 = 7.2 years
Similar to stocks, real estate can double your money roughly every 7-8 years with average returns.
Index Funds
Broad market index funds tracking the S&P 500 have returned about 10% historically:
72 ÷ 10 = 7.2 years
This is one reason why index investing has become so popular—consistent, market-matching returns that double your money regularly.
Cryptocurrency (High-Risk, High-Volatility)
Crypto returns vary wildly, but let’s say a hypothetical 25% average (extremely volatile and risky):
72 ÷ 25 = 2.9 years
While this seems attractive, remember that crypto can also lose 50-80% of its value in short periods. High returns come with high risk.
Passive Income Strategies
For those building passive income streams, the Rule of 72 helps evaluate reinvestment strategies. If you reinvest passive income at 8%:
72 ÷ 8 = 9 years
Your income-generating asset base doubles every 9 years, creating exponential passive income growth.
Real Data Example: Historical Market Returns
Let’s ground the Rule of 72 in actual historical data from the U.S. stock market.
According to data from Morningstar and the Federal Reserve, the S&P 500 has delivered:
- Nominal returns: ~10% annually since 1926
- Real returns (after inflation): ~7% annually
- With dividends reinvested: ~10-11% annually
Applying the Rule of 72 to Historical Data
Nominal Returns (10%):
72 ÷ 10 = 7.2 years to double
Real Returns (7%):
72 ÷ 7 = 10.3 years to double in purchasing power
Verification with Actual Periods
Let’s check if the rule holds up against actual market history:
1980-1987 (7 years): S&P 500 grew from ~100 to ~250 (more than doubled due to an exceptional bull market)
1990-1997 (7 years): S&P 500 grew from ~330 to ~970 (almost tripled during the tech boom)
2009-2016 (7 years): S&P 500 grew from ~900 to ~2,200 (more than doubled during post-crisis recovery)
While individual 7-year periods vary significantly, the long-term average aligns remarkably well with the Rule of 72’s prediction.
The Impact of Starting Points
The Rule of 72 assumes you’re measuring from a “normal” market level. If you invest at a market peak before a crash, your actual doubling time will be longer. If you invest at a market bottom, it might be shorter.
This is why understanding market cycles and maintaining a long-term perspective is crucial for investment success.
FAQ: The Rule of 72
The Rule of 72 is a quick way to estimate how long it will take for your money to double. Simply divide 72 by your annual rate of return (as a percentage), and the result is approximately how many years it will take for your investment to double in value.
The Rule of 72 is remarkably accurate for interest rates between 6% and 10%, with errors typically less than 0.2 years. For rates outside this range, it becomes less precise but still provides a useful approximation for quick mental math and planning purposes.
Yes, but you’ll need to use the annual percentage rate (APR). The Rule of 72 works best with annual compounding, but it still provides reasonable estimates for monthly or quarterly compounding since the differences are relatively small over long periods.
A higher rate of return means faster doubling, but it also typically means higher risk. For context:
4-6% is conservative (bonds, savings)
7-10% is moderate (diversified stock portfolios)
11%+ is aggressive (higher risk investments)
The “good” rate depends on your risk tolerance, timeline, and financial goals.
Absolutely. The Rule of 72 works for any exponentially growing quantity, including debt. If you have credit card debt at 18% APR and only pay the minimum, your debt will double in approximately 4 years (72 ÷ 18 = 4), demonstrating why high-interest debt is so dangerous.
To estimate tripling time, use 115 instead of 72. The formula becomes: Years to Triple = 115 ÷ Annual Rate of Return. For example, at 10% return, your money will triple in approximately 11.5 years (115 ÷ 10).
The Rule of 72 is useful for rough retirement planning estimates, but shouldn’t be your only tool. It’s excellent for understanding general growth trajectories and comparing strategies, but detailed retirement planning should also account for regular contributions, taxes, inflation, and varying return rates over time.
Key Risks and Considerations
While the Rule of 72 is incredibly useful, it’s important to understand its limitations and the broader context of investing.
Market Volatility Isn’t Captured
The formula assumes steady, consistent returns. Real market experience:
- Bull markets (rising prices)
- Bear markets (falling prices)
- Corrections (short-term declines)
- Crashes (severe, rapid declines)
Your experience will include all these phases, not a smooth 8% or 10% every single year.
Sequence of Returns Matters
Two investors with the same average return can have very different outcomes depending on when they experience good and bad years. This is called “sequence of returns risk,” and it’s particularly important near retirement.
Behavioral Factors
The Rule of 72 assumes you’ll stay invested. In reality, many investors:
- Panic sells during downturns
- Chase performance by buying high
- Make emotional decisions
- Fail to rebalance portfolios
- Incur unnecessary taxes and fees
These behavioral mistakes can significantly reduce your actual returns compared to what the Rule of 72 predicts.
Not All Returns Are Equal
An 8% return from:
- Stable dividend stocks are very different from
- Volatile growth stocks or
- Speculative investments
Risk-adjusted returns matter. Sometimes a lower, more consistent return is preferable to a higher but more volatile one.
Practical Action Steps: Putting the Rule of 72 to Work
Now that you understand the Rule of 72, here’s how to actually use it in your financial life:
Step 1: Calculate Your Current Doubling Time
Look at your investment accounts and calculate their historical returns (or expected returns). Apply the Rule of 72 to see how long until your money doubles.
Step 2: Set Specific Doubling Goals
Instead of vague goals like “grow my wealth,” set concrete targets:
- “I want my $50,000 portfolio to reach $100,000.”
- “I need my retirement account to double twice before I retire.”
Step 3: Compare Investment Options
When evaluating new investments, use the Rule of 72 to quickly compare doubling times. This helps you understand the real-world impact of different return rates.
Step 4: Monitor and Adjust
Review your actual returns annually and recalculate your doubling timeline. If you’re falling short, you may need to:
- Increase contributions
- Adjust your asset allocation
- Reduce fees
- Improve your investment strategy
Step 5: Educate Others
Share the Rule of 72 with family members, especially younger relatives who can benefit most from understanding compound growth early in life.
Step 6: Use It for Debt Payoff Motivation
Calculate how fast your debt doubles at its current interest rate. This can be a powerful motivation to pay it off aggressively or refinance at a lower rate.
The Rule of 72 and Building Long-Term Wealth
The true power of the Rule of 72 isn’t in the calculation itself—it’s in the mindset shift it creates.
When you internalize that your money can double every 7-10 years with reasonable stock market returns, you begin to think differently about:
Time as Your Greatest Asset
A 25-year-old has 5-6 potential doubling periods before retirement at 65. A 45-year-old has only 2-3. This explains why starting early is so crucial—you’re not just saving for more years, you’re capturing additional doubling periods.
The Cost of Waiting
Every year you delay investing is a year less for compound growth to work. The Rule of 72 makes this concrete: delay 7 years at 10% returns, and you’ve lost an entire doubling period.
Small Differences Compound Dramatically
The difference between 8% and 10% returns might seem small—just 2 percentage points. But using the Rule of 72:
- 8% → doubles in 9 years
- 10% → doubles in 7.2 years
Over 40 years, that’s 4.4 doublings versus 5.5 doublings—a massive difference in final wealth.
The Importance of Staying Invested
When markets crash and you’re tempted to sell, remember: you only need to stay invested long enough for another doubling period to recover and grow. Historical data shows markets have always recovered given enough time.
For more insights on building sustainable wealth, explore additional resources and strategies on long-term financial growth.
Conclusion: Mastering This Simple But Powerful Tool
The Rule of 72 is one of those rare financial concepts that’s simultaneously simple enough for a child to understand and powerful enough for sophisticated investors to use daily.
By dividing 72 by your expected annual return, you can instantly visualize how your money will grow over time. This simple calculation helps you:
Compare investment opportunities at a glance
Set realistic financial goals based on actual timelines
Understand the power of compound interest in concrete terms
Make faster, more informed decisions about where to invest
Appreciate why starting early makes such a dramatic difference
Evaluate the true cost of high-interest debt
Teach others about financial growth and planning
While the Rule of 72 isn’t perfectly precise and shouldn’t replace detailed financial planning, it’s an invaluable mental model for thinking about investment growth.
Your Next Steps
- Calculate your current doubling time for your main investment accounts
- Set a specific doubling goal for the next 7-10 years
- Use the interactive calculator above to experiment with different scenarios
- Share this knowledge with someone who could benefit from understanding it
- Review your investment strategy to ensure you’re on track to achieve your desired returns
- Consider the risk-return tradeoff and make sure your portfolio aligns with your goals and risk tolerance
Remember: the best time to start investing was 7.2 years ago (when your money could have doubled by now at 10% returns). The second-best time is today.
The Rule of 72 isn’t just about mathematics—it’s about understanding that time and consistent returns are the most powerful wealth-building tools available to regular investors. Use this knowledge wisely, stay disciplined, and watch your wealth grow through the magic of compound interest.
References and Further Reading
To deepen your understanding of the concepts discussed in this article, consider exploring these authoritative sources:
- U.S. Securities and Exchange Commission (SEC): Compound Interest Calculator – Official government resource on investment calculations
- Investopedia: Rule of 72 Definition and Formula – Comprehensive explanation with examples
- Morningstar: Historical market return data and investment research
- Federal Reserve Economic Data (FRED): Historical inflation and interest rate information
- CFA Institute: Professional investment education and research
Disclaimer
This article is for educational purposes only and does not constitute financial advice. The Rule of 72 provides estimates, not guarantees. Past performance does not predict future results. Investment returns vary based on market conditions, asset allocation, fees, taxes, and individual circumstances.
Before making investment decisions, consider consulting with a qualified financial advisor who can assess your specific situation, risk tolerance, and financial goals. All investments carry risk, including the potential loss of principal.
The examples and scenarios presented in this article are hypothetical and for illustration purposes only. Actual investment results will differ and may be higher or lower than the examples shown.
About the Author
Written by Max Fonji — with a decade of experience in financial education and investment strategy, Max is your go-to source for clear, data-backed investing education. Through TheRichGuyMath.com, Max helps everyday investors understand complex financial concepts and build long-term wealth through smart, evidence-based strategies.
Max’s mission is to make financial literacy accessible to everyone, breaking down intimidating concepts into practical, actionable knowledge that anyone can use to improve their financial future.