How to Turn $10,000 Into $160,000 by the Time You Retire
There's a shorthand investing calculation known as the Rule of 72. For typical rates of expected investment returns, it can help you see how long it will take your money to double. To use it, you divide 72 by the rate of return you anticipate earning, expressed as a number. For instance, if you think you will earn a 9% annual rate of return, the rule of 72 would estimate that your money would double in eight years, dividing 72 by 9 to get eight.
That Rule of 72 guideline is key to helping you understand how to turn $10,000 into $160,000 by the time you retire. After all, the only thing you need to do to make that math work is for your money to double four times -- from $10,000 to $20,000 to $40,000 to $80,000 and finally to $160,000. At that 9% annual rate of return -- around the market's long-term historical average -- it would take around 32 years (8 multiplied by 4 to get 32) for that doubling math to work its magic for you.
Image source: Getty Images.
Source Fool.com
