There aren’t many shortcuts when it comes to building wealth and achieving financial independence. To create meaningful wealth, you need to either build a killer product or provide impeccable service. Same is true of investing you have to work at it, you have to grind it out. Okay, maybe this isn’t entirely true. In the world of investing, there is a quick-and-dirty math trick you can use to determine how long it will take to double your money. It may even make you look like you know what you’re talking about.

So, what is this financial trickery you ask? It’s called the Rule of 72.

The Rule of 72 is a shortcut to estimate how many years it’ll take for an investment to double in value, assuming a fixed annual rate of return. All you do is divide 72 by the interest rate (or expected annual return), and voilà—you’ve got your timeline. It’s actually an estimate and not exactly accurate, but it’s close enough for most practical purposes and works like a charm for back-of-the-napkin calculations. 

Here’s the formula:

Years to Double = 72 ÷ Annual Rate of Return 

Let’s Break It Down with Examples

Say you’ve got an investment earning a steady 6% per year. Plug that into the Rule of 72:

72 ÷ 6 = 12 years.

So, in about 12 years, your money doubles. Start with $10,000, and you’re looking at $20,000 without lifting a finger. Not bad, right? 

Now, let’s crank it up. What if you’re a rockstar investor (or just lucky) and snag a 12% annual return?

72 ÷ 12 = 6 years.

That same $10,000 turns into $20,000 in half the time. See how this works? The higher the return, the faster your wealth grows. 

On the flip side, if you’re stuck with a measly 2% return, you’re suddenly looking at 36 years.

Yikes. That’s a lifetime to double your cash—practically a geological era in investing terms. 

Why It Matters for Investors like us

As investors trying to grow our nest eggs—the Rule of 72 is a reality check. It shows you the power of compounding and how even small differences in returns can drastically change your financial future.

More importantly though, it can be a wake-up call: if your money’s not working hard enough, you might need to rethink your strategy. Are you chasing 2% in a “safe” bond when you could be aiming for 8% in a diversified equity portfolio? The Rule of 72 lays it bare. It’s a great tool for setting expectations. You can develop a quick intuitive answer without diving into a full-blown financial model. It’s practical and it’s fast.

A Little History.

The Rule of 72 isn’t new—it’s been around since at least the 15th century, credited to Italian mathematician Luca Pacioli. It’s an approximation based on the natural logarithm of 2 (about 0.693), but 72 is used because it’s divisible by so many numbers (1, 2, 3, 4, 6, 8, 9, 12…), making it super convenient for mental math. The real magic happens because it ties into the exponential growth of compound interest—something Einstein supposedly called the “eighth wonder of the world.” (Whether he actually said that is debatable, but it sounds cool, so I’m rolling with it.) 

Caveats to Keep in Mind

The Rule of 72 isn’t perfect. It assumes a constant rate of return, which we all know is a fantasy in the real world—markets zigzag, inflation bites, and taxes can nibble away at your gains. It also works best for rates between 6% and 10%. Go too high (like 20%) or too low (like 1%), and the approximation gets a bit wobbly. Still, for a quick gut check, it’s unbeatable. 

 So the next time you’re eyeballing an investment—whether it’s stocks, real estate, or even a side hustle—run it through the Rule of 72. Ask yourself: “How long will it take to double my money at this rate?” If the answer doesn’t excite you, maybe it’s time to hunt for something with more juice. 

What do you think—have you used the Rule of 72 before? Got a favorite rate of return you’re chasing? Drop a comment below.

Until then, invest wisely, invest boldly, and get wealthy!

Disclaimer: This post is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult with a financial advisor before making investment decisions.