Rule of 72?

If you have a rate of return, divide that rate into 72.  The result is approximately how many years it will take to double your money.

For Example:  If you $10,000 and you invest in a CD at your bank for 2% annual return, it will take you 36 years to double your investment

How many doubles do you have until you reach the age where you want to start taking money out?

Age 40 and you want to retire at 65 - 10% return compounded annually.

a. You only have 25 years.

b. If you double every 7.2 years you will have 3.47 doubles left. With $10,000 starting out then you will have approximately $120,000

c.  If you don't think this is enough to retire, you will have to start with more money or obtain higher yield on you investments.

d.  For example - 15% yield, only 5% higher will get you 5 doubles and over $320,000.  

Does that work for you.  

If you started when you are 25 you  would have 8 doubles at 15%.

But I don't have any money you say.

There is more money than deals.  You can do a lot with other peoples money to get to the $10,000 mark.  One of the keys is that you need to fund a Roth IRA to make this really work.  Pay the taxes on the money going in and no taxes on the money coming out. The 25 year old will have $2,560,000 and if he or she only take out 5% a year they will receive $128,000 tax free.  I know that the value in money will be worth about half of that in today's dollars but you have not used any of your principle yet.  Just embrace the concept and learn how to use it.  Remember this is a very minor contribution to a secure future.

Don't think you can get 15% yield.  Learn how to use a financial calculator and how the time value of money works.  I have used this to get consistent 35% yield and even higher.  Do whatever it is that you do to live on and treat this as a retirement option.  I have made $1,000,000 loans at 5 points and 15% interest rate. They are short term loans and secured by real estate.  Do I have a million dollars to lend, no, but I have investors that want 8-10% an no points. The 10% they want to make will double their money in 7.2 years with out having to source the deal or put it together.  All win. Calculate how much that would make me with none of my own money.  Yield is the answer.