RULE OF 72 – The secret to quickly estimating when your wealth will double through compound interest!

In the world of investing, everyone has heard of the power of compound interest – but not everyone knows how to quickly calculate the growth rate of their money. That’s where the Rule of 72 comes into play!

What is the Rule of 72? Time for money to double = 72 ÷ Interest rate (%/year) Example: interest rate of 8% → 72 ÷ 8 = 9 → your money will double in 9 years.

If you want your money to double in 6 years, just reverse the calculation: Required interest rate = 72 ÷ 6 = 12%/year

You can apply this to inflation too! Example: average inflation of 6%/year → after 12 years, your money will lose half its value. This is why saving alone isn’t enough – you need to invest to preserve your money’s value.

Note when interest rates fall outside the 6–10% range The Rule of 72 works best with interest rates from 6% to 10%. If it goes beyond, you can adjust:

• Interest rate 5% → use Rule of 71
• Interest rate 11% → divide by 73
• Interest rate 14% → divide by 74
• Interest rate 22% → divide by 77

Example: investing at 22%/year → your money will double in about 3.5 years.

Why is the Rule of 72 useful?

1. Helps you calculate quickly and intuitively, no complex formulas required
2. Applicable to both investing and managing inflation risks
3. Builds a foundation for financial planning and goal setting
4. Suitable for everyone – from new investors to wealth managers

Money doesn’t grow by itself – it needs time, interest, and strategy! The Rule of 72 is your roadmap to designing a smart financial journey.

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