How to become rich: There are many such formulas in the world of personal finance, by following which you can easily achieve your financial goals. Or say that they give you the convenience in reaching the goals. There are some such rules, which tell when your money will double, triple or quadruple in an investment. These are the rules of 72, 114 and 144. Let us know about them in detail.
Rule of 72
The rule of 72 tells when your money doubles in an investment option. To understand the rule of 72, you have to divide the possible annual rate of return by 72. For example, you have invested Rs 1 lakh in an investment option that is giving 8 percent annual return. Now, dividing 72 by 8 gives 9. This 9 is the number of years it will take for your investment to double. That is, in this investment, it will take 9 years for your Rs 1 lakh to become Rs 2 lakh.
Rule of 114
The rule of 114 tells how much time it will take for your investment to triple. In this rule, you have to use 114 in place of 72. For example, if an investment is giving you 10 percent annual return, then it will take 114/10 = 11.4 years for your money to triple. In this way, it will take 11.4 years for your money to triple in this investment.
Rule of 144
With the rule of 144, we can find out how much time it will take for our investment to become 4 times. For this, you have to put 144 in place of 72 in the formula. For example, if an investment is giving you 12% annual return, then it will take 144/12 = 12 years for your money to become 4 times in this investment. You can also use this formula in reverse to find out how much annual return will be required to make your investment 4 times in so many years.
Discussion about this post