The Rule of 72: how fast does your money double?

Want to do investing math in your head, with no calculator, in about three seconds? There's a trick for that. It's called the Rule of 72, and once you know it you'll use it for the rest of your life.

It answers one simple question: how long until my money doubles?

The rule, in one line

Take the number 72. Divide it by your yearly growth rate. The answer is roughly how many years it takes for your money to double.

That's the whole thing. 72 ÷ rate = years to double.

A few quick examples

• Money growing at 10% a year (the stock market's long-run average): 72 ÷ 10 = about 7 years to double.
• Money growing at 7% a year: 72 ÷ 7 = about 10 years to double.
• Money in a savings account at 2% a year: 72 ÷ 2 = 36 years to double. Ouch.

See how much the rate matters? At 10%, your money doubles five times in 36 years. At 2%, it doubles once. Same patience, wildly different result.

Why doubling is the magic word

Doubling sounds modest, but watch what happens when it keeps going. Start with $10,000 at 10%:

• Year 7: $20,000
• Year 14: $40,000
• Year 21: $80,000
• Year 28: $160,000
• Year 35: $320,000

Each double is bigger than all the doubles before it combined. That's the engine of compound interest, and the Rule of 72 lets you feel it without any hard math.

Use it backward, too

The rule works in reverse. If you want your money to double in a certain number of years, divide 72 by the years to find the rate you'd need.

Want to double in 9 years? 72 ÷ 9 = 8% a year. Now you know what kind of return that goal requires — and whether it's realistic or wishful thinking.

The honest fine print

Two things to keep honest:

• It's an estimate, not exact math. It's closest for rates between about 6% and 10%. Close enough for mental math, not for filing taxes.
• Real returns bounce around year to year. The market doesn't calmly hand you 10% every year — it's the long-run average that smooths out. The rule tells you the trend, not a promise.

The takeaway

72 divided by your growth rate equals the years to double. It takes three seconds, no calculator, and it turns vague ideas about investing into real numbers you can picture. Memorize it. It's the most useful piece of money math there is.