UPDATE: For an interesting follow-up to this post, see The Rule of 72, 114, and 144
Have you ever wondered how long it would take to double your money? Triple? Quadriple? The answer depends on the rate of return. Naturally, the higher the rate of return, the less time it takes to double, triple, or quadruple your investment. It’s not hard to figure out if you have Excel, or you can just use the three graphics I created:
NOTE: Keep in mind that these graphics assume linear (straight line) growth, which never happens in the real world.
So, if you have $100,000 in your retirement account and you get an annual rate of return of 8%, it will take 18 years for that original $100,000 to grow to $400,000 (not counting any additional contributions).
I just thought you’d like to know.