Investing RULES

How fast will your money grow ?

Rule 72

This tells you in how much time will your money double. Divide 72 by the interest rate you are compounding your money with and you will arrive at the number of years it will take to double in value.

Rule 114

How long will it take to Triple your money?

If the interest rate is

9%Then your money will triple in 114/9 = 12.6

12.6 years

How fast your will your money erode ?

Rule 70

This is a useful rule for predicting your future buying power. Divide 70 by the current inflation rate to know how fast will the value of your investment get reduced to half its present value. This is especially useful for retirement planning, as it affects the way you set up your monthly withdrawals.

Inflation rate of

7%Will reduce the value of your money

to half in

70/7 = 10

10 years

The other rules

The 10, 5, 3 Rule

You can expect returns of 10 % from Equities5%from Bond and 3% on liquid cash

100 minus your age rule

This rule is used for asset allocation. Subtract your age from 100 to find how much your portfolio should be allocated to equities.