How to double your money in five years? | Value Research (2024)

FAQs

How do I double money in 5 years? ›

An equity-debt allocation of 50:50 may be suitable. But don't invest in equities in one go; rather, spread your money over 2-3 years. Assuming average returns of 6-7 per cent from your debt investments and 11-12 per cent from equity, you can expect to earn an annual return of 9-10 per cent.

For example if you wanted to double an investment in 5 years, divide 72 by 5 to learn that you'll need to earn 14.4% interest annually on your investment for 5 years: 14.4 × 5 = 72. The Rule of 72 is a simplified version of the more involved compound interest calculation.

What is the Rule of 72? Here's how it works: Divide 72 by your expected annual interest rate (as a percentage, not a decimal). The answer is roughly the number of years it will take for your money to double. For example, if your investment earns 4 percent a year, it would take about 72 / 4 = 18 years to double.

How can you make $5,000 turn into $10,000? Turning $5,000 into $10,000 involves investing in avenues with the potential for high returns, such as stocks, ETFs or real estate. Another approach is to use the money as seed capital for a profitable small business or side hustle.

Buy a low-cost index fund that tracks the S&P 500; your $100,000 could grow to $1 million in about 23 years. You'll get there even faster by investing additional funds. Add $500 monthly and reach $1 million in just 19 years. Of course, past results don't guarantee future outcomes, but history is on investors' side.

Dividing 72 by the annual rate of return gives investors an estimate of how many years it will take for the initial investment to duplicate. It is a reasonably accurate estimate, especially at low interest rates.

After the first doubling, it will double again in the next 4 years, and then a final time in the subsequent 3 years. Applying the 8:4:3 rule means that your mutual fund investment will quadruple over 15 years and increase eightfold in 21 years.

One of those tools is known as the Rule 72. For example, let's say you have saved $50,000 and your 401(k) holdings historically has a rate of return of 8%. 72 divided by 8 equals 9 years until your investment is estimated to double to $100,000.

The $1 rule is simple: If something will cost $1 or less per use, it's okay to buy. A $10 item should get at least 10 uses. A $100 item should get 100 uses, and so on.

How to invest $2000 dollars and double it? ›

The classic approach to doubling your money is investing in a diversified portfolio of stocks and bonds, which is likely the best option for most investors. Investing to double your money can be done safely over several years, but there's a greater risk of losing most or all your money when you're impatient.

How can I double $5000 dollars? One way to potentially double $5,000 is by investing it in a 401(k) account, especially if your employer matches your contributions. For example, if you invest $5,000 and your employer offers to fully match at 100%, you could start with a total of $10,000 in your account.

The time required for a sum of money to double at 5% annum compounded continuously is (in years) 13.9.

One of the best ways to double your money is to take advantage of retirement and tax-advantaged accounts offered by employers such as 401(k)s.

It would take 14.4 years to double your money. Applying the rule of 72, the number of years to double your money is 72 divided by the annual interest rate in percentage. In this question, the annual percentage rate is 5%, thus the number of years to double your money is: 72 / 5 = 14.4.

Expert-Verified Answer

Under continuous compounding at an annual interest rate of 6.5%, it will take approximately 10.67 years for an initial investment of $1000 to double in value.