The Rule of 72
A rule of thumb that estimates how long it will take money to double, given a certain rate of interest, compounding annually.
Key Insights & Principles
Personal Finance
Insights:- To estimate how long it will take an investment (or debt) to double, given a specific compound interest rate, divide the expected rate into 72.
- Expected returns greatly influence how long it will take for investments to grow over time.
- Spending today means giving up a significantly larger amount of money in the future.
- Money invested for a long time will produce huge gains.
- Financial freedom can be achieved faster if you can figure out how to generate higher returns.
- Commit to investing over long time.
- Constantly look for money to invest.
- Do not touch your investments.
- Use the power of compounding to increase your wealth.