The power of compounding can be truly amazing. An investment of only $1000 earning 12% will grow to $30,000 in 30 years, compounded annually. If the investment was only earning 6%, it would be worth less than $6,000 over the same time period.
In order to determine quickly how long it takes to double your investments at different rates, I usually use the rule of 72. I simply divide 72 by the annual percentage growth to obtain the time it would take me to double the investment. Thus if you earn 12% annually for example it would take you 6 years to double your investment. At 6% it would take you twice as long or twelve years to double your investment.
In order to determine quickly how long it takes to triple your investments at different rates, I usually use the rule of 115. I simply divide 115 by the annual percentage growth to obtain the time it would take me to double the investment. Thus if you earn 5% annually for example it would take you 23 years to triple your investment. At 13% it would take you nine years to triple your investment.
Relevant Articles:
- Dow 370,000
- My Dividend Growth Plan - Stock Selection
- When to sell your dividend stocks?
- The ultimate passive investment strategy
Popular Posts
-
Welcome to my weekly review of dividend increases . I have done this process for over eleven years on my site, in order to share with reader...
-
A few days ago, I posted an inspiring quote on Twitter . I stated that if you have a portfolio worth $1 million, you can easily expect to ge...
-
As part of my monitoring process, I review the list of dividend increases every week. I use this process to update my files on companies I o...
-
Dividend momentum is a strategy that takes full advantage of the theory behind companies in motion, who tend to stay in motion for years and...
-
Update : I made an error in one of assumptions, which several readers pointed out to me. The error was related to the option where you put...
-
Fastenal Company (FAST), engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, and int...
-
As part of my monitoring process , I review the list of dividend increases every week. This is helpful in checking developments for companie...
-
Kimberly-Clark Corporation (KMB), together with its subsidiaries, manufactures and markets personal care, consumer tissue, and professional ...
-
In the last example , I ran some numbers in order to determine if it was better to pay off my mortgage early or to invest the money and use ...
-
For this week’s review of notable dividend increases, I have included four companies which raised distributions last week. Each company has ...
