00:00Here's a 10-second trick to know exactly how fast your money doubles.
00:03It is called the Rule of 72.
00:05You just divide 72 by your annual interest rate,
00:08and the answer is how many years it takes your money to double.
00:11Earning 6%, 72 divided by 6 is 12 years.
00:16A savings account paying only 2%, that is 36 years, 3 times slower.
00:21And at 10%, your money doubles in just over 7 years.
00:25Same starting money, wildly different finish lines,
00:28all because of the rate.
00:30Let us make it real.
00:32Imagine you invest $10,000 at age 25.
00:35At 6%, it doubles every 12 years.
00:38$20,000 at 37,000, $40,000 at 49,000, $80,000 at 61,000.
00:44All from a single $10,000 with no extra effort.
00:47At 2%, that same $10,000 takes 36 years just to reach $20,000.
00:53The gap is enormous.
00:55And remember, inflation eats into these numbers,
00:57so your real return is what counts.
01:00One warning, the Rule of 72 works for debt, too.
01:04A credit card at 24% doubles what you owe every 3 years.
01:08That is why where you put your money matters as much as how much you save.
01:12Quick math.
01:13At your rate, how many years until your money doubles?
01:17Comment your number below.
01:18Do it.
01:18You
