Purpose: Estimate in your head how long money takes to double, and use the same trick to see what inflation, fees and debt really cost you.
Compound growth is hard to picture. "7% a year" sounds modest. "Your money doubles roughly every 10 years" is much easier to feel. The Rule of 72 turns one into the other with a single division.
The rule
Years to double ≈ 72 ÷ yearly rate (in %)
At 6% a year: 72 ÷ 6 = 12 years. At 9%: 72 ÷ 9 = 8 years.
How close is it? Here it is against the exact answer, with interest added once a year:
| Yearly rate | Rule of 72 | Exact |
|---|---|---|
| 2% | 36 years | 35.0 years |
| 4% | 18 years | 17.7 years |
| 6% | 12 years | 11.9 years |
| 8% | 9 years | 9.0 years |
| 10% | 7.2 years | 7.3 years |
| 12% | 6 years | 6.1 years |
Between about 4% and 12% it's off by a few months at most. That's good enough for any decision you'd make in your head.
Why 72? It's close to the exact maths, and it divides cleanly by 2, 3, 4, 6, 8, 9 and 12, so the sum is easy without a calculator.
It works backwards too
Want to double your money in 10 years? You need about 72 ÷ 10 = 7.2% a year. In 5 years? About 14.4%, which no savings account pays and which no investment pays reliably.
That makes the rule a quick check on offers: if someone promises to double your money in two or three years, they're promising 24–36% a year. Ask how.
Inflation doubles prices the same way
The rule works for anything that grows by a percentage, including prices.
At 3% inflation, prices double in about 24 years. Cash that earns nothing buys half as much after 24 years. At 6% inflation, that happens in 12 years.
So the number that matters is the real return: what you earn minus inflation. An investment returning 7% while prices rise 3% grows your buying power by about 4% a year. That doubles in about 18 years, not 10.
Fees halve your growth faster than you think
A yearly fee comes straight off the return. Compare the same fund with and without a 1.5% yearly fee:
| 7% a year | 5.5% a year (7% − 1.5% fee) | |
|---|---|---|
| Doubles every | ~10.3 years | ~13.1 years |
| €10,000 after 10 years | €20,097 | €17,311 |
| €10,000 after 30 years | €81,165 | €51,874 |
| €10,000 + €200/month after 30 years | €326,582 | €235,434 |
Over 30 years, a 1.5% fee costs €29,291 on a single €10,000, and €91,148 if you also add €200 a month. You'd have paid in €82,000 yourself, so the fee takes more than everything you saved.
Figures from our Investment Prediction Calculator with a custom return and interest added monthly, so money doubles slightly faster than in the first table, where interest is added once a year. Fees of 1.5–2% are common in actively managed funds and some pension products; broad index funds often charge a fraction of that. Check the fund's ongoing charge before you compare returns.
Debt doubles too
The rule doesn't care which side of the balance sheet you're on.
A credit card at 24% a year doubles an unpaid balance in about 3 years (72 ÷ 24). €2,000 left untouched becomes roughly €4,000, before any late fees.
That's why paying off expensive debt is one of the best returns available: every euro repaid on a 24% card "earns" 24%, guaranteed, which no investment can promise.
Where the rule breaks down
- Very high or very low rates. Above about 20% the rule starts to undershoot (at 24% the exact answer is 3.2 years, not 3). It's still fine for a rough idea.
- Returns aren't steady. An index that averaged 9.5% a year over the long run didn't earn 9.5% every year. Some years it fell 20% or more. The rule tells you the average path, not your path. That's why the calculator shows a likely range when you pick an index (S&P 500 or MSCI World).
- It's for a single sum. If you add money every month, the total grows faster than the rule suggests, because you keep adding. Use the calculator for regular contributions.
- Taxes and fees. Use the return you actually keep, after fees and tax, or the answer will be too optimistic.
How it fits into Volora
The rule is about growth over years, so it helps to see whether your money is keeping up. In Volora, Total Wealth shows your real return after inflation, alongside your savings rate. If the real return is close to zero, your money isn't doubling at all, it's only keeping pace. More on the net worth tracker.
Quick checklist ✅
- Divide 72 by the yearly rate to get the years to double.
- Use the rate you actually keep: after fees, and ideally after inflation.
- Divide 72 by the inflation rate to see how fast cash loses half its value.
- Check your fund's yearly fee. A 1.5% gap can cost more than you pay in.
- Divide 72 by your card's interest rate before you leave a balance unpaid.
- For monthly saving and a realistic range, use the Investment Prediction Calculator.
This post is general guidance, not financial advice. Past returns don't guarantee future ones.