Rule of 72
MENTAL MATHYears to Double = 72 ÷ Rate
A quick mental math trick to estimate how long it takes to double your money at a given annual return rate.
EX ▸ At 8% return → 72 ÷ 8 = 9 years to double
01 / FORMULAS
The Math Behind Wealth
These equations have built fortunes. The first one is live — drag the inputs and watch it run.
● LIVE MODEL — COMPOUND INTERESTA = P(1 + r)^t
P — PRINCIPAL$10,000
r — ANNUAL RETURN8%
t — YEARS INVESTED30 YRS
FINAL AMOUNT
$100,627
10.1× your money · years to double at this rate: 9.0 yrs (Rule of 72)
GROWTH CURVE — YEAR 0 → 30
Y0 · $10,000Y30 · $100,627
FIRE Number
FIREFIRE = Annual Expenses × 25
Financial Independence, Retire Early. Multiply annual expenses by 25 to find how much you need to live off investments indefinitely (4% withdrawal rule).
EX ▸ $50,000/yr expenses → need $1,250,000
Net Worth
FUNDAMENTALSNet Worth = Assets − Liabilities
The true measure of your financial health. Track this number monthly. Rich people focus on growing assets, not just income.
EX ▸ $300k home + $50k stocks − $200k mortgage = $150k
Return on Investment
INVESTINGROI = (Gain − Cost) ÷ Cost × 100
Measures the efficiency of an investment. Use this to compare any opportunity — stocks, real estate, business, education.
EX ▸ Buy $1,000 → sell $1,500 → ROI = 50%
Savings Rate
SAVINGSSavings Rate = Saved ÷ Income × 100
The single most powerful lever for building wealth. A 50% savings rate means you can retire in ~17 years regardless of income level.
EX ▸ Save $2,000 on $4,000 income → 50% rate
Debt-to-Income Ratio
DEBTDTI = Monthly Debt ÷ Gross Income × 100
Lenders use this to assess risk. Below 36% is healthy. Above 43% is a red flag. Eliminate high-interest debt first.
EX ▸ $1,500 debt on $5,000 income → 30% (healthy)
The 50/30/20 Rule
BUDGETING50% Needs + 30% Wants + 20% Savings
A simple budgeting framework. Half your income covers needs, 30% for enjoyment, and 20% goes toward your financial future.
EX ▸ $5,000 income → $2,500 / $1,500 / $1,000