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The Rule of 72

If you want to know how long your money will take to double in value with your current interest rate on savings or rate of return on investment, use the Rule of 72. Merely divide 72 by the interest rate you currently receive. At 3% a year it will take 24 years to double. If you invest for a higher rate of return of 8% it will take only 9 years.

You can take the same rule to calculate how quickly inflation will erode the purchasing power of your savings.  If the inflation rate is 4% then it will take 18 years for the purchasing power of your money to halve.

With interest rates at all time lows and expected to remain low, it might be time to to seeking higher yielding optiosn to protect and build those assets for the future.

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