The Rule of 72

The math shortcut that reveals everything

The Rule of 72 is the most useful piece of math in personal finance. It tells you how long money takes to double at any interest rate. Once you know it, every savings account, credit card, and investment looks different.

Divide 72 by the interest rate. Answer is years until your money doubles. At 8%, every 9 years. At 12%, every 6. At 1%, every 72.

The rule reverses on debt. At 22%, a credit card balance doubles every 3.3 years if you ignore it. Same equation, opposite result.

Key points

• At 1% (typical savings), money doubles every 72 years. You'll be long gone before it matters. Savings alone doesn't build wealth.
• At 8% (historical stock market average), money doubles every 9 years. $10,000 becomes $20,000 in 9 years, $40,000 in 18, $80,000 in 27. Same money, just time.
• At 22% (average credit card), debt doubles every 3.3 years. A balance you ignore turns into a monster. The rule runs in reverse.
• Doubles matter more than dollars. One extra double can be worth more than a decade of extra deposits. Goal is more doubles, not more effort.

Run a personal audit

Pull up every account. Savings, checking, retirement, cards, loans. Apply the Rule of 72 to each rate. How many doubles work for you? How many against? That gap is where most people quietly lose.