The Rule of 72: double your money in your head

Here's a trick that's also genuinely useful: you can estimate how long money takes to double, in your head, with a single division.

Divide 72 by the rate

At an annual return of r percent, money roughly doubles in 72 ÷ r years. At 8%, that's 72 ÷ 8 = 9 years. At 6%, twelve years. At 12%, just six.

Why 72?

It falls out of the math of compounding — the natural log of 2 is about 0.693, so the "true" number is near 69.3. But 72 is close enough for the rates most people actually see (roughly 6% to 10%), and it divides cleanly by 2, 3, 4, 6, 8, 9 and 12. That divisibility is why 72 beats 69 or 70 for doing it in your head.

Run it backwards

It works in reverse too. Need your money to double in six years? You need about 72 ÷ 6 = 12% a year. A vague goal becomes a concrete rate.

The lesson hiding inside

Small differences in rate are enormous over time. 6% doubles in twelve years; 12% doubles in six. Over a lifetime that's the gap between doubling three times and doubling six — 8× versus 64×. Understanding that one fact changes how you think about fees, raises and returns.