The Rule of 72

Everybody wants to see their money growing and the very first question that comes in mind is ‘How many years will it take to double the amount? ’ . For this Rule of 72 is the best way to understand the concept. What is the rule of 72? It states that you can find out how many years it will take for your investment to double by dividing 72 by the percentage rate of growth. So it will take 8 years for your investments to double if it grows at 9% a year (72/9=8). But it will take only 4 years if they grow at the rate of 18% a year and so on.
The biggest thing that investors should appreciate about compounding is the enormous value of time. As your returns themselves start earning, and then the returns on those returns themselves start earning, the profit starts piling up at an enormous pace.Starting to save at the age of 35 instead of 50 can mean retiring with four times the wealth. If one has time to learn just one thing about investing, then it should be this.