A friend once told me, “I’m saving really well — I put all my money in the bank every month.”
Out of curiosity, I asked him: “At what % is your money growing there?”
He replied proudly, “Around 2% interest.”
Then I asked him a different question:
“Do you know how long it will take for your money to double at 2%?”
He had no idea. So I showed him the Rule of 72.
The Rule of 72
The Rule of 72 is a quick way to figure out how long it will take for your wealth to double, given a fixed annual growth rate.
The formula is simple: Years to Double = 72 / Annual Growth Rate (%)
It’s like a cheat code for understanding compounding without a calculator.
But keep in mind: this is an approximation, not exact math. It works best for interest rates between 6–10%. Outside that range, the result may be slightly off, but it’s still a powerful mental shortcut.
My Friend’s Shock
When we did the math for his savings account: 72 ÷ 2% = 36 years
That means if he left his money untouched, it would take 36 years to double!
Now compare that to an investment growing at 8% annually: 72 ÷ 8% = 9 years
The difference? At 8%, your money doubles four times in 36 years. At 2%, it doubles only once.
The Bigger Picture
It’s not just about investments — the Rule of 72 applies to your entire financial life:
- If your income is growing at 10% per year, it doubles in about 7 years.
- If your skills grow at 15%, your career opportunities can double in under 5 years.
- If inflation is 3%, the purchasing power of your money will halve in 24 years (72 ÷ 3).
So the question isn’t just “Am I saving?” — it’s “At what % is my wealth growing?”
Final Thought
Money grows quietly, but the speed of growth makes all the difference.
The Rule of 72 is a simple way to peek into the future and see whether your money is sprinting, jogging, or just crawling forward.
So, ask yourself today: How much % is your wealth really growing?
SavvyGrowthPaths 