# How to Double Your Money

Everyone wants to be able to earn money and double it. People are constantly looking for ways to invest with the goal of quickly doubling their money. In a risky investment, money can be doubled in hours or days. However, there are many risks associated with these types of investments, and it is possible to lose all of one's money in a matter of seconds.

However, people may also increase their money without purchasing risky investments. If they are patient and not in a tremendous rush, a properly balanced portfolio or even one that's only made up of extremely low-risk bonds can accomplish the task. However, one shouldn't anticipate doubling their money overnight. But, people may gradually double their money if they use the right strategy.

Money can be multiplied in various ways, but the main factors are risk and time. One needs to take time and make an investment if one wants to double his money; this requires patience and the right decisions. The return on investment varies from individual to individual since it depends on various variables, including the nature of the market, inflation, economic reforms, supply and demand, and more.

However, one should be very honest and straightforward regarding risk appetite or risk tolerance, as different people have different risk-taking abilities. If one thinks that he can't be calm while staying invested in the volatile or risky markets, he should look after an investment that is not so volatile or with low risk. People can also interact with their financial advisors to make the right investment decision as per their risk tolerance.

## The Rule of 72

When money is invested, it grows significantly over time. Considering that returns are compounded, the money might even double. One may determine when the invested money will double in value using the "Rule of 72" approach.

Number of years to double the money = 72 / Interest Rate or Returns (%)

The above formula helps in determining the period (years) that an investment takes to double at the given interest rates or returns of that investment.

For instance, Consider that the original investment is Rs. 30,000, and one invests it in an instrument that yields, let's say, 12% annually. In such a case, the initial Rs. 30,000 investment will grow to Rs. 60,000 over the course of 6 years (72/12).

The "Rule of 72" results allow a person to evaluate different investing possibilities. According to the formula above, the faster the money doubles, the higher the interest rate. The risk increases, nevertheless, with an increase in interest rate.

Therefore, using the method above, one can compute and make decisions while evaluating risk and reward. Based on the established investment objectives and other considerations, the portfolio may contain both low-risk and high-risk instruments.

## Different Ways to Double Money

### Mutual Funds

A mutual fund is a type of financial instrument that pools money from numerous individuals to make investments in stocks, bonds, and short-term debt. Investors purchase shares in mutual funds, and each share reflects the ownership interest of the investor in the fund and the returns it generates. Mutual funds are a good option for investments since they have the potential to grow over time. These come in a variety of forms, and investors can select the one that best meets their needs.

In comparison to other investment instruments, mutual funds provide larger returns on investment, but the risk is also higher. In general, the length of a mutual fund's duration determines its returns; the higher the returns, the longer the term. Generally, the long-term fund returns rate ranges from 10-15% annually. When considering longer periods, equities mutual fund schemes may be able to double your investment in 5-6 years, based on their performance. Similarly, the funds (which invest in debt instruments) with low/conservative risk profiles could take up to 10 years to double the investment.

### Stock Market

The stock market is a marketplace where investors can purchase and sell publicly traded company shares. Stock market investments can potentially provide a greater rate of return. In the past ten years, the stock market has seen a 15% annualised rate of return.

The equity or stock market is seen as a rapid way to make more money when it comes to double investments. The stock market aids in the quick growth of one's money by buying and selling equities that have a high rate of return on investment. However, there is a significant level of risk in the stock market, and investors must take this into account before making an investment. In this case, investment growth is determined by fluctuating market conditions. Consequently, investors could end up losing their money.

The likelihood that one's money will double over a specific time period can be increased by investing in reputable and successful businesses. Direct stock/share investments can have a greater risk and also could offer higher returns equally. Therefore, before making an investment, it is necessary to comprehend the technical and fundamental aspects/knowledge of the stock market.

### Fixed Deposits (FD)

Another conventional investment option that has traditionally been one of the simplest and low-risk methods to generate positive returns is the fixed deposit (FD). Until a predetermined duration, a fixed deposit is a financial product that offers investors a higher interest rate than a typical savings account. It is a risk-free investment choice with a certain return guarantee. Additionally, unlike other investment tools, interest is unaffected by the market. The primary amount is also not at risk of loss. Bank Fixed Deposits offer yields of about 8% to 9%, with a distinct and higher percentage for older persons. In about 8 to 9 years, one's financial situation will have doubled.

### Real Estate

Real estate investment is a conventional strategy to multiply one's investment. Since buying real estate demands significant capital, it is currently not a proposition that many find appealing to everyone. The benefit of this is that a property's value can increase twofold in six to seven years while still producing a steady stream of revenue in the form of rental income. Though it requires a significant initial capital commitment, it will yield benefits in the long term.

If someone makes a bet without thoroughly researching the markets, it could turn out to be a risky decision. Nevertheless, if one properly analyses and examines historical trends and has a skill for anticipating how future trends will look, real estate has the ability to yield speedy profits. Asset ownership, portfolio diversification, and tax reduction are all possible. However, the return is influenced by several variables, such as the location and infrastructure growth in the surrounding communities.

### National Savings Certificates (NSC)

National Savings Certificates (NSC), a type of investment offered by the Indian Postal Department, is among the safest choices without much risk. These certificates have predetermined periods of five and ten years, as well as a fixed interest rate which is based on the term. The rate of interest provided on NSCs with a 5-year duration is around 8.50% annually, and on the other hand, NSCs with a term period of 10 years have an interest rate of 8.80% annually. NSCs are exempted from the tax up to Rs.1,50,000 under section 80C, and no TDS is applied to the maturity amount paid at the completion of the policy period. Additionally, the investor may use NSCs to apply for bank loans.

### Public Provident Fund

A yearly minimum deposit of Rs.500 is needed to invest in PPF, and the plan has a 15-year lock-in duration. This scheme offers the lowest possible contribution in comparison to other saving plans/schemes, and salaried, self-employed, or government employees can all invest in the PPF. The rate of return is provided at 8.75% annually, and the investment will double in about 8 years.

### Gold ETFs

Gold is typically a popular purchase option for making money. An average return of approximately 10% has been consistently provided by gold over time. One can also invest in gold bonds and gold exchange-traded funds (ETFs) to increase the value of gold holdings. The ETF investment option was introduced in India in 2002, and it is one of the simple methods to invest in precious metals that provide good returns on an annual basis. It is, nevertheless, a risky investment choice that is influenced by market conditions, interest rates, and the length of the investment. One's money could be doubled with this choice within three to five years.

## Bottom Line

Everyone wants to enhance their wealth and looks for ways to multiply their money. Although it depends on the investor's capacity for risk and available time, it is essential to have a thorough grasp of each investment instrument before making a purchase. There are numerous options available to increase wealth or double the money/investments, depending on the risk tolerance, availability of time, and desire to understand personal finance for a secure future. Before making a decision, considering the investment's time frame and risk tolerance will help one choose a solid investment strategy. Long-term investments are preferred since they have a solid likelihood and reliable characteristics of growing the money by double. Despite this, before selecting any investing option, always consult a financial advisor.