The Financial “Rules of 72, 78 and 115”


By Dr. David Edward Marcinko MBA


Use the rule of 72 to calculate how long it would take an investment to double. The rule of 72 is that an investment that earns 10 percent interest will double in 7.2 years. Use this as a starting point for calculating various interest rates and lengths of time, by dividing the number 72 by your interest rate.

For instance, if you are investing at a more conservative rate of 5 percent, you’d divide 72 by 5 for a total of 15 years (rounded up) for your money to double.



RULE 115

To figure out how long it would take your money to triple, use 115 instead of 72. So at an interest rate of 3 percent, it would take 38 years (115/3), for your initial amount to triple.



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2 Responses

  1. “Observations on the 4% Rule”

    I’m engaged in the 3rd great cycle of my research on retirement portfolio withdrawals. The first, begun in 1993 used just two asset classes and resulted in the “4% Rule.” The second, begun in 2005, used 3 asset classes, and resulted in my book and the “4.5% rule.” In this third cycle, I hope to add three new equity asset classes. Not sure what I will discover yet!

    The first step in each cycle involves re-doing my spreadsheets to accommodate the new asset classes. This is no minor task. My current spreadsheets contain over one million formula cells and I plan to expand them by about 25%.

    Spreadsheets are finicky things. Make one small mistake, and the “4% rule” could become the “2.5% rule”! To avoid errors, I take a very deliberate approach to changes. I constructed a procedure with 15 steps to modify each of the 300 retirement scenarios I currently employ. That’s 4,500 steps total!

    Clearly, this will take a while. See you on the other side, in a few months!

    Ann Miller RN MHA
    via Bill Bengen


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