Formula to double your money, do you believe that? Well, I do. There is such a formula and what you need for doubling your money are: time, rate of return and of course patience. Here, I will give you the formula in which actually I found in a Financial Book a year ago:
X = 72 : Y
X = years needed to have your money doubled
Y = rate of return of your investment (in percentage)
72 = is constant, always use 72 in this formula
Actually this formula is known as Formula 72
In example, you deposits $10,000, with 9% interest rate annually, so you can have your money doubled in 8 years time.
If you want to test the calculation, you can take your calculator and calculate :
($10,000 x 1..09) x 1.09 x 1.09 x 1.09 x 1.09 x 1.09 x 1.09 x 1.09
You will have $ 19,925.65 in your calculator, which means with compounded interest you will double your $10,000 within 8 years if the interest rate is 9% annually.
Is not that great? Imagine if the rate of return of your investment id 12% annually, then it’s only going to take you 6 years .How about if it is 15%, 20%, and so on…..
But to use the formula, you need to be patient. You should keep the money in your investment accounts and let time and the compounded interest work for you, just co-operate with the formula and you will have your money double with time.
As a matter of fact, you can use this formula to plan your retirement funds. After you calculate how much you need for your retirement days and how many years before you retire, then what you have to do is to choose the right investments. Of course you still have to keep an eye on your investments whether they grow as you plan or you need to switch to other investments that give you the returns you want.
There are lots of great investments out there and they are still improving, so keep you up to date with the financial (investment) issues.