Have you heard of the Rule of 72? (It sounds boring, doesn’t it? I promise you, it’s not.)
The Rule of 72 is a quick way to determine how many years it will take for money to double with a given interest rate. Divide the interest rate into 72 and get the approximate number of years.
For example, at 8% interest, money will take about 9 years to double.
72 / 8 = 9
So let’s say that you have $100. In 9 years, you’ll have about $200.
When I was a kid, my dad would drill me on the Rule of 72 — mainly in the car on long trips. At the time, it wasn’t very interesting. So what if I’d have $200 in 9 years? (Actually, it seemed terrible. I’d have to wait 9 years to have a measly $200? Why was that worth talking about?)
The key, though, that makes this concept REALLY powerful is…