FYI: Josh teaches new investors about compound rates of return by employing the Rule of 72. You take a yearly rate of return – say 7% – and divide it into the number 72 to find out how many years it takes to double. So, in this example, an investor receiving a 7% rate of return will see his or her money double in ten years. At 5% a year, an investor will wait 14 years to see their investment double. At 9% a year, they’ll wait just 8 years.
It works backwards too – you can ask “What rate of return must I earn in order to double my money in the next six years and the answer is 72 divided by 6 – you’ll need to compound at 12% for six years in order to get there.
Regards,
Ted
https://thereformedbroker.com/2019/01/22/double-your-money/
