How to Double Your Money Using Simple Interest Rate Formula

Posted by Grace under Investing on September 25, 2015

Learn how to double your money using the proper way of investing money. Know how to double your money in a day, a week, a year or even as fast as you want.

Want to know how to double your money?  In investing money, you don’t have to be a mathematician just to learn how to double your money. Want to learn how to make your money increase twice, thrice, quadrupled or more? You just need simple formula. It’s the rule of 72. I will explain to you later how does the rule of 72 works. Anyone who wish to double their money should invest their money. That statement is a fact. However, if you just want to make your money look like it’s two object, just cut it or put it in front of the mirror. That’s not what you want to know about, right?

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Learning to double your money today is a good idea. Maybe you are curious how does rich people are getting rich. They know how to accumulate or multiply their money. How do rich people accumulate their money? Simple, it’s called “investing”.

So what is investing? Investing money is process of spending money to make money. Therefore, if you want to double your money, you should not just spend it, instead, spend it wisely and make sure your money will multiply when buying things. Buying things such as new gadgets, new dress, new car can’t help you make your money doubled. Unless you’re into a “buy and sell” business.

So, how to double your money by spending it to make more? By buying things that appreciates value. Example of the things that appreciates value are real estate properties, gold and other expensive jewelries, stock shares and mutual fund shares.

Now, think! If your goal is to double your money, will you buy new car just to impress your friends and neighbors, a cars that depreciate value or real estate properties that appreciate its value? I know you will choose real estate properties.

The Formula in Doubling Your Money

The RULE of 72 can help you know how to double your money in a specific period of time. This rule can also applied not only in a year, but also work for daily and weekly investing. How it works? To easily understand, let’s make some few examples. (Although I already explained the rule of 72 in InvestmentTotal.com’s previous post).

How to Double Your Money Using Simple Interest Rate Formula

Image Credit: Chris Potter via Flickr CC 2.0

Investment Vehicle Investment Capital Investment Goal Number of Years Interest Rates
Stocks $10,000 $20,000 5 14.4%
Mutual Fund $10,000 $20,000 7 10.28%
Bonds $10,000 $20,000 15 4.8%
Real Estate $10,000 $20,000 3 24%
Business $10,000 $20,000 2 36%

Vehicle: A types of investments where you invests your money. Examples of these types of investments is stocks, mutual funds, real estate, business ownership, bonds, gold.

Capital: Your investment capital. The total amount of money you put in an investment vehicle.

Goal: Your goal must be to double your investment capital. If your investment capital is $10,000, you should have $20,000 after a specific period of time.

Interest Rates: A required interest rates to achieve your goal. We will use rule of 72 to know the required interest rates.

Years: Number of year to make your money doubled in correlation of required interest rates.

Example: Stock Market Investing (Use the table above).

I have $10,000 in my pocket and want to invest in the stock market. I want to turn my $10,000 into $20,000 after 5 years. Therefore, my money I invested in stock market should earn 14.4% per year. Because of compound interest, my investment capital will doubled in 5 years.

Safest Way to Double Your Money

Maybe you asked, stock market is very risky. I want to double my money after three years. I want to double my money after a year. What’s the safest investment I can try to make my money doubled surely?

how to double your money

Kin Hubbard once said, “The safe way to double your money is to fold it over once and put it in your pocket.” What does this mean? It simply means, there is no safe investment. All investments are accompanied by risks. So, if you really want to double your money, you have to take risk by investing it.

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