Divide 72 by your interest rate to find how many years your money takes to double. A 20-year-old with $10,000 at typical rates sees it reach $40,000 by retirement. Art Williams called it the magic of compound interest.
The Rule of 72. I don't know about all of you, but I find the most people that are most interested in the most things that we talk about when we present is they're blown away by the Rule of 72. Art Williams said that the Rule of 72, the magic of compound interest, completely blew his butt out of the water. He just couldn't believe the difference in 3 and 6 and 12. And he talks about it all the time. And so the Rule of 72, I just tell a story. You're 20 years old, you just inherited 10 grand from your grandparents. The rules were you had to save the money, you had to put the money away till you were ready to retire. So if you put it, let's say, in a bank or a whole life policy, it would grow to $40,000. Well, what's the rule say? How's the rule work? The rule says divide your interest rate into 72. The answer is the number of years it takes your money to double. You all know that, right? But you sometimes you have to explain that, like make sure people get it. Divide the interest rate in. That the answer is how long it takes money to double.
