Author Topic: How long does it take to double your money?  (Read 5699 times)

dcnats

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How long does it take to double your money?
« on: June 01, 2015, 12:37:41 PM »
I've run various simulations based on my own annual savings and rates of inflation and investment return.  You could run a million Monte Carlo simulations and still not cover all that "life" can throw at you.

I'm interested in mustachian accomplishments and would love to hear from others. 

For those who will ask "why bother, these are all different situations and so are irrelevant", I always welcome more data.  Mustachians are planners and these are helpful benchmarks, perhaps trends can be pulled out - for example, maybe it will take 1/3 the time to get from 1-2M as it did to get to 1M?  I would argue that real life achievements will be more applicable than simulations done in a vacuum.

How long from 0- 500k? 
How long from 500k - 1M?
How long from 1M - 1.5M?
How long from 1.5M - 2M?
How long from 2M - 3M?
How long from 3M - 4M?
If you can keep going, keep going!

I'll go first.
How long from 0- 500k?  13 years
How long from 500k - 1M?  6 years
How long from 1M - 1.5M?  projected to be 3-4 years


arebelspy

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Re: How long does it take to double your money?
« Reply #1 on: June 01, 2015, 02:13:13 PM »
Rule of 72.  It takes 72/your interest rate.

The only thing skewing the lower numbers faster is contributions.  If you're adding 30k/yr then doubling from 100k to 200k is way faster than 1MM to 2MM.

Contributions aside, if rate of return is the same, doubling time should be the same.

EDIT: I also notice that many of your numbers didn't double.  0 to 500k is not doubling.  1MM to 1.5MM is not doubling.

Maybe your question was "How long for each 500k?" rather than doubling?  In which case later 500ks will go much quicker due to compounding, since it's a flat dollar amount, rather than doubling (so earning 500k on 1 billion is much quicker than earning it on 1 million).
« Last Edit: June 01, 2015, 02:14:47 PM by arebelspy »
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forummm

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Re: How long does it take to double your money?
« Reply #2 on: June 01, 2015, 02:30:44 PM »
Given the variability of the stock market, you could easily get from 500k to 1 million in a couple years, and then have to wait 5-10 years (even while still contributing) to get to 1.5 million. Your responses will be highly influenced by what years people hit those targets.

ynotme

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Re: How long does it take to double your money?
« Reply #3 on: June 01, 2015, 02:51:02 PM »
I'm interested in real-life examples too. I think the shorter the time-frame, the more the savings rate is important. It would be good to hear about others experiences.

For me:
How long from 0- 500k?  10-12 years (hard to say as I had periods of time off)
How long from 500k - 1M?  4 years (primarily due to high income and high savings rate)
How long from 1M - 1.5M?  projected to be 3-4 years


Mother Fussbudget

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Re: How long does it take to double your money?
« Reply #4 on: June 01, 2015, 06:33:37 PM »
For me
$33K to $1M took 7 years (1991-1997) - a rocking bull market, and investing in CALL options.
$1M to ~$5M took another 2 years (1998-1999) - more of the same + employee stock options powered by one stock.
$5M to $300K took 5 years (2000-2004) - thank you dot-com-bust & US-DOJ/Judge Jackson.
$300K to $150K took another 3 years (2005-2008) - divorce.
$150K to $350K took 6+ years (2009-today) - but the happiness quotient this time (minus companionship) has been priceless.   My advice:  don't focus exclusively on the dollars.  Even rich people aren't happy if their not in a good place in their lives.

Goal:  $1M in 3-5 years.

rpr

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Re: How long does it take to double your money?
« Reply #5 on: June 01, 2015, 06:38:00 PM »
For me
$33K to $1M took 7 years (1991-1997) - a rocking bull market, and investing in CALL options.
$1M to ~$5M took another 2 years (1998-1999) - more of the same + employee stock options powered by one stock.
$5M to $300K took 5 years (2000-2004) - thank you dot-com-bust & US-DOJ/Judge Jackson.
$300K to $150K took another 3 years (2005-2008) - divorce.
$150K to $350K took 6+ years (2009-today) - but the happiness quotient this time (minus companionship) has been priceless.   My advice:  don't focus exclusively on the dollars.  Even rich people aren't happy if their not in a good place in their lives.

Goal:  $1M in 3-5 years.
I just wanted to say Wow. That sounds like one heck of a roller coaster. 

retireatbirth

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Re: How long does it take to double your money?
« Reply #6 on: June 01, 2015, 07:56:27 PM »
For me
$33K to $1M took 7 years (1991-1997) - a rocking bull market, and investing in CALL options.
$1M to ~$5M took another 2 years (1998-1999) - more of the same + employee stock options powered by one stock.
$5M to $300K took 5 years (2000-2004) - thank you dot-com-bust & US-DOJ/Judge Jackson.
$300K to $150K took another 3 years (2005-2008) - divorce.
$150K to $350K took 6+ years (2009-today) - but the happiness quotient this time (minus companionship) has been priceless.   My advice:  don't focus exclusively on the dollars.  Even rich people aren't happy if their not in a good place in their lives.

Goal:  $1M in 3-5 years.

Wow. Talk about risk tolerance. Do bonds make you throw up?

forummm

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Re: How long does it take to double your money?
« Reply #7 on: June 01, 2015, 08:06:00 PM »
For me
$33K to $1M took 7 years (1991-1997) - a rocking bull market, and investing in CALL options.
$1M to ~$5M took another 2 years (1998-1999) - more of the same + employee stock options powered by one stock.
$5M to $300K took 5 years (2000-2004) - thank you dot-com-bust & US-DOJ/Judge Jackson.
$300K to $150K took another 3 years (2005-2008) - divorce.
$150K to $350K took 6+ years (2009-today) - but the happiness quotient this time (minus companionship) has been priceless.   My advice:  don't focus exclusively on the dollars.  Even rich people aren't happy if their not in a good place in their lives.

Goal:  $1M in 3-5 years.

Wow. Talk about risk tolerance. Do bonds make you throw up?

Or diversification. VTSAX would have done just fine.

dcnats

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Re: How long does it take to double your money?
« Reply #8 on: June 01, 2015, 09:32:21 PM »
Rule of 72.  It takes 72/your interest rate.

The only thing skewing the lower numbers faster is contributions.  If you're adding 30k/yr then doubling from 100k to 200k is way faster than 1MM to 2MM.

Contributions aside, if rate of return is the same, doubling time should be the same.
Right, but contributions are not consistent.  Windfalls and hard breaks happen (just look at Mother Fussbudget's story!).  I can do all the calculations in a vacuum, but I am looking for real life timelines and benchmarks.  I think it will help us all get another view since the one we can calculate is well-understood and has blogs and calculators dedicated to it.  My bet is that even though those calculators are accurate, that the odds of anyone following that trajectory is low, and not only because the stock market and real estate returns are all over the place.  People have kids, lose jobs, hit medical expenses, get bonuses, get inheritances, etc. 

Care to share your numbers? 

EDIT: I also notice that many of your numbers didn't double.  0 to 500k is not doubling.  1MM to 1.5MM is not doubling.

Maybe your question was "How long for each 500k?" rather than doubling?  In which case later 500ks will go much quicker due to compounding, since it's a flat dollar amount, rather than doubling (so earning 500k on 1 billion is much quicker than earning it on 1 million).

True true.  I was originally thinking doubling, but while I was writing the actual content I started thinking that most people don't remember years to each doubling, but I bet they remember the big dollar benchmarks.  Plus I thought this way would provide more meaningful data points rather than a ton of data points at tiny numbers.  If I'm wrong feel free to post your doubling timelines!  I don't mind which, more data points are always better in my book.

Thanks for your feedback!  All timelines and numbers are welcome, eagerly awaited, and encouraged!


The Beacon

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Re: How long does it take to double your money?
« Reply #9 on: June 01, 2015, 09:48:51 PM »
350k in 2010. Now 900k.  My ER number is 1.5 M.  1.2M should be enough but I would like to add a bit more cushion.
 

Mother Fussbudget

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Re: How long does it take to double your money?
« Reply #10 on: June 02, 2015, 10:01:14 AM »
My advice from this:  No matter how large your stache gets, manage it YOURSELF.  NEVER think "it's too big for me - I could screw it up."  Probably not... but an 'advisor' could certainly screw things up. 

When my original stache reached ~$4M, I got worried that it was too much for me to deal with, so I got a "financial advisor" who then drove my investments into the ground.  He had me investing in crazy shit, and I foolishly went along with him.  Even after telling him on Dec 30, 1999 to "sell everything, and get into bonds, Apple stock, and index funds" (a move which would have saved millions, BUT... he talked me OUT of doing) he put my funds into stupid investments...  including (but not limited to ENRON... this AFTER the company was on it's way down, but before the depth of the financial shenanigans was clear.  "It's Enron.  They're not going away anytime soon."  yeah, right).  I was doing just fine on-my-own. 

Beware the 'financial advisor' - keep it simple.  Invest in what you KNOW.  Save.  Pay taxes.  Avoid taxes you can legally avoid.  And live a happy life.  Money does NOT bring happiness.  Happiness is a state of mind - firmly establish happiness in your life, and no one can take THAT away... ever.

catccc

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Re: How long does it take to double your money?
« Reply #11 on: June 02, 2015, 10:59:22 AM »
11 years to 500K, I'm hoping it takes 5 years after 500K to get to 1M.  We are mostly on track for that at this point.  I hope.



nedwin

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Re: How long does it take to double your money?
« Reply #12 on: June 02, 2015, 01:20:27 PM »
. . .
$5M to $300K took 5 years (2000-2004) - thank you dot-com-bust & US-DOJ/Judge Jackson.
. . .

That sounds like more of a story than a "financial adviser" that made poor decisions, especially the DOJ/Judge Jackson part . . .

James

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Re: How long does it take to double your money?
« Reply #13 on: June 02, 2015, 01:28:31 PM »
. . .
$5M to $300K took 5 years (2000-2004) - thank you dot-com-bust & US-DOJ/Judge Jackson.
. . .

That sounds like more of a story than a "financial adviser" that made poor decisions, especially the DOJ/Judge Jackson part . . .


But not a relevant story to the topic at hand.