How Long It Takes to 2x, 3x, 4x... Your Money Invested Based on Rates of Return

Question

I like to measure investments by the time it takes to double my money.  Many times we overly excited about % compounded rates of returns and this is a visual I created to help understand that relationship.  The X (Blue) Axis shows number of years.  The Y Axis (Black) shows a annual percent return.

The table values in the middle shows your multiple of your invested amount over the period of time.

So for example, in the below highlighed row, an 8% annual compounded return will take 9 years to 2x your initial money.  If you took that 9 years and compounded by 13.5% you would have tripled your money (3x).

Similarly, a 10% rate of return will take you ~5.5 years to double (2x) your money.

Put another way, you can ask it what percentage return do i need to see to 2x my monty in 3 years.  (Answer is 15% by the table).

Here's a link to the spreadsheet I used to create this:

https://docs.google.com/spreadsheets/d/1YVoDTsw673wnR_Px2BBv...

Happy yield hunting.

Dominic Mazzarella · Answer

This kind of framework is really useful to keep expectations in check. It’s easy to get caught chasing unusually high returns and forget how long compounding really takes. Most decent deals in real estate, especially when factoring in some leverage and forced appreciation, fall into the 8-12% range annually. That means doubling your money realistically takes 7 to 9 years, not 3 or 4. If someone promises you 15% returns yearly to double in 3 years, I'd dig into how they’re achieving that and what risks they’re taking. .

Jose Cortes · Answer

I usually use the rule of 72 to determine how long it will take me multiply my money.

Len Mazur · Answer

@Jose Cortes rule of 72 works best for annual interest rates between 6-10%.