How the Rule Works

Divide 70 by the growth rate to estimate doubling time. At 7%, money doubles every 10 years — $10,000 becomes $20,000, then $40,000, and so on, reaching $160,000 after 40 years without adding a dollar. The same rule applies to inflation: at 3%, purchasing power halves in about 23 years.

Why Doubling Compounds So Fast

Each doubling multiplies the previous total, not the original — after four doublings, $10,000 has become $160,000, sixteen times the start. The Rule of 70 makes this visible: count the doublings across your time horizon (40 years ÷ 10 = 4) and multiply by 2 each time. It turns abstract exponential growth into simple arithmetic.

Using the Rule Backward

Need $100,000 in 14 years with $50,000 saved? 70 ÷ 14 = 5% — that is the minimum return your money must earn to get there. Flipping the equation tells you the required rate for any goal and horizon, making it a planning tool as much as a curiosity.