2. George Divel: Applying the Rule of 72
George Divel, vice president of investments at
Global Wealth Advisors, is based in Baltimore.
Working regularly with clients to provide
customized investment solutions, Divel works with
stocks, credit products, and mutual funds.
Securities and advisory services offered through
Capitol Securities Management, Inc. Member FINRA
& SIPC. A registered Broker/Dealer and Registered
Investment Advisor.
3. George Divel: Applying the Rule of 72
A mathematical concept used frequently in the
finance industry, the rule of 72 is applied to find the
number of years it will take for a sum of money to
double in value. This is done by dividing the number
72 by the percentage rate of return. The resulting
figure is an estimate of how many years it would
take for the investment, or the debt, to double in
size.
4. George Divel: Applying the Rule of 72
Used in reverse, the rule of 72 can be applied
against a number of years to find the rate of return
required to achieve a certain financial result. If an
investment portfolio should triple in value, and the
investor has 20 years to achieve this result, the
number of years found by applying the rule of 72
would give an indication of the average rate of
return required to produce this result. If it is
unrealistic within the constraints of an investor’s
risk tolerance, they may choose to increase the
number of years, add extra funds to the portfolio,
or reduce the targeted financial goal.
