Every
investor would be keen to know how much time it will take for their investment
to Double/triple/Quadruple. The time required for Doubling/Tripling/Quadrupling
is dependent on the return your investment could generate. High return on
investment would speed up growth, and reduces the time period while a low
investment return grows slowly and would take more time for it to Double/Triple/Quadruple.
Following rules will help investor to quickly compute time required for your investment to Double/Triple/Quadruple.
Rule of 72: Captures the time period
required for Doubling (Ex $ 100 going to $ 200)
Assume
Mr X would like to double his money by investing. The number of years it takes
to double would depend on the investment he chooses. Mr X can arrive at number of
years (for doubling) by dividing 72 by average investment return he
chooses
Rule of 114: Captures the time period
required for Tripling (Ex $ 100 going to $ 300)
Assume
Mr X would like to triple his money by investing. The number of years it takes
to triple would depend on the investment he chooses. Mr X can arrive at number of
years (for tripling) by dividing 114 by average investment return he
chooses
Rule of 144: Captures the time period
required for Quadrupling (Ex $ 100 going to $ 400)
Assume
Mr would like to quadruple his money by investing. The number of years it takes
to quadruple would depend on the investment he chooses. Mr X can arrive at number of
years (for quadruple) by dividing 144 by average investment return he
chooses
Conclusion: The speed at which your money would multiple depends on the
return it would generate. The table above indicates, a Bank FD takes 16.3 Years for
tripling; while equity potentially can quadruple in 12 years. So be wise in
selecting the investment asset class.
