facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Easy Financial Math! Thumbnail

Easy Financial Math!

Thinking about retirement? Trying to decide when or if you'll have enough money? Here's a quick financial tip that you can use right this minute. It's called the Rule of 72.

What is the Rule of 72?

The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. And it goes like this:

Say you have $100,000 in your 401K plan and it has averaged a 6% return over it's life. How long until you double your money? You simply take 72 divided by the rate of return and that's how many years it will take. Example 72/6 = 12. In 12 years you would have doubled your money or have $200,000 based on this rule. (It will be considerably more than this if you keep investing during the 12 years).

Let's say your rate is a whopping 10%. You would take 72/10 = 7.2. It would only take you 7.2 years to double your money. (It will be considerably more than this if you keep investing during the 12 years).

It works in every situation and with every investment and it's easy. No complicated equations.

80/20 Financial Services is an independent  Registered Investment Advisory Firm. Our focus is working with retirees, and we specialize in working with retirees who are approaching or going through the retirement transition. We are located in Ozark, MO but we have the ability to work with clients throughout the United States. Contact us today for help with your retirement needs.

Thanks for reading!

Brian Coleman/Retirement Planner/Investment Manager