Have you ever heard of the “Rule of 72″ when it comes to interest, investments, and finances? It’s a very generalized rule that helps you get a close estimate as to how many years it will take for your principle to double (given compounding interest), at any given rate. Here’s the formula: 72/(Interest Rate) = Doubling period.

example: 72/3 = 24 years to double. 72/12 = 6 years to double.

So let’s say you’re 20. And you’ve got $2000 burning a hole in your pocket. If you invest it (one time, no future payments) at 3%, by the time you’re 68, it will be worth $8000. If you invest the same money at 12%, you’ll end up with $512,000 by age 68. In other words, choose your investment(s) wisely.

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