Re: Average yearly return
One useful tool figuring this type of question out is: the rule of 72.
You take your return and put the value 72 over it. The result is a rough idea of how many years to double your bets.
Example: Stock market returns 11% a year for 70 years.
72/11 = 6.54 (years to double)
So if you are 22 and you have 20K figure:
160K of value in 26 years, (4 doubles,) at 48 years old, assuming 11% a year average return.
20, 40, 80, 160
If you earn 22% and not 11%, you get:
72/22 = 3.27 years to double. That's roughly 8 doubles in 26 years
20, 40 , 80, 160, 320, 640, 1280, 2560. Twice the doubles, 16 times the total return.
26 years and 20k.
Earn 11% and get 160K.
Earn 22% and get 2560K.
16 times more return over the same period of time.
Start young and be aggressive.
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