The magic number is 72. The rate of return divided into 72, gives the number of years required for an investment to double. At a 4% annual rate of return, your capital will double in 18 years. At 6%, it will double in 12 years. At 8%, it will double in 9 years.
The average annual return on the S&P 500, over the last 50 years is 10%. That is, if you invest and leave it invested, so that you smooth out the better years and the bad years.
So, figure a 9% annual rate of return, and your investment doubles every 8 years. "The most powerful force in the universe is compound interest." Albert Einstein.
The average annual return on the S&P 500, over the last 50 years is 10%. That is, if you invest and leave it invested, so that you smooth out the better years and the bad years.
So, figure a 9% annual rate of return, and your investment doubles every 8 years. "The most powerful force in the universe is compound interest." Albert Einstein.