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
-
I started my Dividend Growth Investor Newsletter in an effort to educate investors on how to build and manage a dividend growth portfolio, ...
-
There were three companies with at least a decade of dividend increases under their belt which hiked distributions last week. I reviewed th...
-
This is a guest post by Nick McCullum from Sure Dividend . Sure Dividend uses The 8 Rules of Dividend Investing to systematically identi...
-
Warren Buffett is the best investor in the world. He managed to snowball his networth from roughly $10,000 in the early 1950s to over 80 bil...
-
Last week, there were four dividend increases from companies which have at least a decade of annual dividend growth under their belts. The m...
-
Imagine that you are able to receive a lump sum today, due to an event such as a sale of a business, cashing out of a pension, inheritance o...
-
As part of my monitoring process , I review the list of dividend increases every week . I have also found it helpful to incorporate this mon...
-
Altria Group, Inc. (MO), through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States. It ...
-
Dollar cost averaging is a process, where the same amount of funds is allocated to preset investment/s at regular intervals of time. It is ...
-
I reviewed three companies which raised dividends last week. Each of these companies has managed to boost dividends annually for at least te...
