The Rule of 72 Is an Easy Way to Assess Your Investments. Are You Using It?

The Rule of 72 is an easy way to calculate how long it will take your investment to double in value. Here's how it works.

Math and learning images penciled on bright yellow backdrop, images include globe and algebra equations
(Image credit: Getty Images)

If you've dabbled in investing, you've likely heard of the "Rule of 72." It's a back-of-the-envelope metric for calculating how quickly an investment will double in value. 

Most financial metrics are a little too complex to be done in your head. You're going to need a spreadsheet or a financial calculator to calculate the internal rate of return, yield to maturity, or common risk metrics like beta or standard deviation. The beauty of the Rule of 72 is that it can be calculated by the average 9-year old. 

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Charles Lewis Sizemore, CFA
Contributing Writer,

Charles Lewis Sizemore, CFA is the Chief Investment Officer of Sizemore Capital Management LLC, a registered investment advisor based in Dallas, Texas, where he specializes in dividend-focused portfolios and in building alternative allocations with minimal correlation to the stock market.