The Rule of 72 is a specific rule that investors use to calculate the amount of time it could take for an investment decision to double. It assumes that there are no additional contributions and an accurate annual rate of return is established. Profits will continue to increase because every year you make money with the profits of the previous year. With that average annual return of 10 percent, you can double your money in about seven years, Cramer said.
For those looking for more information on gold investing, a gold investing guide can provide more insight into the process. For those looking for a more secure option, a Gold Silver Backed IRA may be the way to go. This type of IRA offers the potential for higher returns and greater security than traditional investments. The Rule of 72 is a calculation that calculates the number of years it takes to double your money with a specific rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. How long does it take to double your money? You can probably have twice as much wealth in 10 years if you invest it in stocks, or 72 years if you go to a savings account.
Mathematics is worth understanding. The Rule of 72 is a simplified way of calculating how long it takes for an investment to double, given a fixed annual interest rate. You divide 72 by the annual rate of return you receive on your investments, and that figure is a rough estimate of the years it will take to double your money.