Finance Rule #03

The Rule of 72

Divide 72 by your annual return rate to find how many years it takes to double your money.

"At 12% returns — 6 years. At 6% — 12 years. Every percentage point matters enormously."

The Rule of 72 is the fastest mental math tool in investing. It reveals why the difference between 8% and 12% returns is not 4% — it's the difference between doubling in 9 years and doubling in 6.

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