The Surprising Investing Shortcut Every Canadian Should Use to Double Their Money Faster (2026 Guide)

 

The Rule of 72: How One Simple Trick Changed the Way a Canadian Family Planned Their Future

When Mark, a 32-year-old teacher from Barrie, first heard the phrase “Rule of 72,” he assumed it was some obscure tax law or CRA regulation. Little did he know that this simple little rule would change the way he approached saving, investing, and building wealth for his young family.

He was sitting in his kitchen one cold February morning, sipping a double-double and scrolling through emails, when his friend, a financial planner, sent him a message:

If you want to know how fast your money will double, just divide 72 by the return rate.

Mark blinked. That’s it? That’s the whole rule?

Curiosity kicked in. He grabbed a pen, opened a fresh page in his notebook, and wrote in big letters:

72 ÷ interest rate = years to double your money

That moment was the beginning of a financial transformation, not just for him, but for anyone ready to understand how powerful compounding really is.

Let’s take you through this journey the same way Mark learned it.

What Is the Rule of 72? (The Moment Everything “Clicks”)

The Rule of 72 is a quick mental shortcut that estimates how long it will take for your money to double at a given interest or investment return rate.

It works like magic because it’s based on the principle of compound growth, the snowball effect that Einstein supposedly called “the eighth wonder of the world.”

As Mark scribbled the numbers, he realized something shocking:

• At 6%, his money would double in 12 years.

• At 8%, it would double in 9 years.

• At 10%, only 7.2 years.

Small percentage changes suddenly didn’t seem so small anymore.

Why the Rule of 72 Works (And Why Canadians Love It)

As Mark dug deeper, he learned that the Rule of 72 isn’t a random number. It comes from logarithms and compound interest formulas, but thankfully, most of us don’t need to relive Grade 12 math to use it.

Here’s why the rule works especially well for Canadians:

• Our TFSA and RRSP systems reward long-term compounding

• Many investments (index funds, ETFs, balanced portfolios) fall within the “ideal” 4–12% return range

• It helps us compare GICs, Mutual funds, Index funds, and even inflation, all with one simple formula

Mark told his wife that night:

It’s like having a cheat code for planning money.

And he wasn’t wrong.

How the Rule of 72 Works: A Real-Life Canadian Example

Mark had $10,000 in his TFSA, invested in a low-cost Canadian index ETF. Historically, it earned about 7% per year.

He grabbed his calculator:

72 ÷ 7 = 10.28 years

Ten years to double? Seriously?

Let’s walk through what Mark discovered:

Year	Value at 7%	Rule of 72 Estimate
0	$10,000	Starting point
10	~$20,000	First doubling
20	~$40,000	Second doubling
30	~$80,000	Third doubling

He turned to his wife and said:

If we do nothing else, just keep this $10,000 invested, it could grow to $80,000 by the time we’re in our early 60s. Tax-free!

That’s the moment compounding clicked for them.

How Canadians Can Use the Rule of 72 in Everyday Life

Mark began applying the Rule of 72 to every financial decision he made, and soon other people at his school were asking him for advice. Here’s how he explained it.

1. Using the Rule of 72 for Retirement Planning (RRSPs)

If your RRSP grows at 6%, your money doubles every 12 years.

That means a single $5,000 contribution in your late 20s could double multiple times by retirement.

Suddenly, those “boring” yearly contributions looked like superheroes in disguise.

2. Using It for TFSA Growth

Because TFSA growth is tax-free, compounding shines brightly here.

With an 8% return, your TFSA doubles every 9 years:

• Age 25: $5,000

• Age 34: $10,000

• Age 43: $20,000

• Age 52: $40,000+

All tax-free.

Mark realized early contributions were a goldmine.

3. RESP Growth for Kids

RESPs benefit from government grants, giving them a built-in boost.

At 7%, money doubles every 10 years.

Mark set up automatic monthly deposits and said:

If I start early, one dollar today could turn into eight dollars by the time my daughter starts university.

4. Seeing Inflation in a New Light

One night, Mark wondered:

If inflation is 4%, how long before prices double?

He applied the rule:

72 ÷ 4 = 18 years

Meaning: if inflation stays at 4%, everything, from groceries to gas to housing, could cost twice as much in under two decades.

Suddenly, investing wasn’t optional. It was essential.

The Rule of 72 Works for Debt Too (And It’s Terrifying)

Mark decided to test the rule on his old credit card debt.

With a 20% interest rate:

72 ÷ 20 = 3.6 years

Meaning his unpaid balance would double every 3.6 years.

He stared at the number and muttered:

No wonder I never felt like I was making progress…

The Rule of 72 isn’t just a growth tool, it’s a wake-up call.

Limitations of the Rule of 72

Mark became almost obsessed with using the rule everywhere—until his friend reminded him of one important thing:

The Rule of 72 is an approximation, not an exact formula.

It works best when:

• Interest rates are between 4%–12%

• You’re dealing with compound interest

• You’re looking long-term

• Returns are fairly consistent

It’s less accurate when:

• Interest rates are extremely low or high

• Returns fluctuate wildly

• Interest doesn’t compound

Still, for everyday financial planning, it’s one of the simplest and most powerful tools around.

Comparison Table: The Rule of 72 at a Glance

Return Rate	Years to Double	Used For
3%	24 yrs	Safe GICs, bonds
5%	14 yrs	Conservative portfolios
7%	10 yrs	Balanced portfolios
8%	9 yrs	Higher-growth TFSAs
10%	7.2 yrs	Aggressive investing

Frequently Asked Questions

1. Does the Rule of 72 really work?

Yes, financial planners use it daily.

2. Can I use it for TFSA or RRSP planning?

Absolutely. It gives a quick, helpful estimate.

3. Can the Rule of 72 help with mortgage calculations?

Not very well, mortgages use fixed payments, not doubling.

4. Does it apply to inflation?

Yes! Just replace the return rate with the inflation rate.

5. Can I use it for debt?

Definitely. It’s one of the best ways to see how fast credit card balances grow.

Conclusion: A Simple Rule That Changes Everything

When Mark first stumbled upon the Rule of 72, he figured it was just another math trick. But it became something far more meaningful: a lens through which he could see the future value of every dollar he saved—or failed to save.

Today, he uses it to plan his retirement, manage his TFSA, grow his daughter’s RESP, and protect himself from the dangers of high-interest debt.

And now, you can too.

The Rule of 72 isn’t just about money doubling.
It’s about your confidence doubling.
Your knowledge doubling.
Your future doubling.

All from one simple number.

I use this FREE Investment Calculator all the time. Check it out here!