Wealth Building Over Time

Not a representation of any actual investment result or what you can achieve

How Fast Will Money Double?

Average Annual ReturnYears to Double
5%14.2 years
8%9 years
12%6.1 years

Rule of 72 Estimate For Other Returns

Divide 72 by your annual rate of interest or earnings. The result will tell you about how many years it will take for your money double:

It isn't exact but close. For example at 2% the rule of 72 results in 36 years vs. the actual math number of 35 years.  

How Much Will $10,000 Grow to

Years/Ave Return




5 years




10 years




15 years




20 years




25 years




BUT Investment Return Does Not Equal Average Return

The most common method of projecting future retirement values of portfolios is using an average annual return analysis.  But this is an illusion of stability since returns vary greatly year-by-year.  The timing of returns and especially losses result in a very different result than just an average annual return.  We make no representations of any potential investment returns, simply show the importance of timing using hypothetical returns. This is not a representation of any actual investment result or what you can achieve.

Timing Risk

If you suffer a bear market loss of 30%, how much do you have to gain to make up for the 30% loss? Most people might falsely think 30%.  No, you have to gain 43% just to break-even after a 30% loss!  The sequence of investment returns can make a huge difference in how large your nest egg might really turn out to be. For many years my emphasis has been analyzing the historic downside risk of an investment portfolio vs. the historic returns compared to other investment alternatives.  You cannot avoid downside risk, but it can be analyzed based on historic performance.  We make no assurances of any investment result, or that risk reduction techniques will be successful.

Example: Hypothetical 5% average return is better than 20% - If you are saving $10,000/year

Not a representation of any actual investment result or what you can achieve

Average Return12 %12 %12 %5 %20 %
Year 1 return12 %-12 %24 %-35 %45 %
Year 2 return12 %24 %24 %25 %45 %
Year 3 return12 %24 %- 12 %25 %- 30 %
Ending Value37,79341,30733,24338,28131,867

A 5% average return ended up with a greater value than two of the 12% average return scenarios did. A 20% average ended up with a lower value than any of the 12% scenarios and less than the 5% average return scenario.

The example shown is hypothetical and does not represent any particular investment.

Calculation does not take into account the reinvestment of interest (compounding) or any tax-deferred equivalent taxable return.

Source of table and results:, Industry White Paper.  Excerpts of the article with full credit, being shared under the Fair Use provision of the U.S. Copyright law for educational purposes.

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