Want to double your savings? Kashmiri investors can rely on the Rule of 72

For students, entrepreneurs, and families in Kashmir, a common question arises: “How long will it take for my savings to double?” In a region where financial literacy is slowly expanding and people are exploring investments beyond traditional saving habits, the answer doesn’t have to be complicated.

Enter the Rule of 72 — a simple mental formula that helps you estimate the time it takes for your money to double at a fixed rate of return.

What is the Rule of 72?

The Rule of 72 is straightforward: just divide 72 by the annual rate of return, and the result is the approximate number of years it will take for your investment to double.

Formula:

72 ÷ Rate of return per annum = Years to double

For example, at a 12% annual return:

72 ÷ 12 = 6 years.

This means if a Kashmiri investor puts aside Rs 1 lakh today, it could grow into Rs 2 lakh by 2031.

Why is it important in Kashmir’s context?

Traditionally, Kashmiris have relied on gold, livestock, real estate, or simple bank savings as the main ways to secure wealth. But with inflation eroding purchasing power and bank deposits offering modest returns, the younger generation is exploring mutual funds, SIPs, and equity markets.

Here, the Rule of 72 becomes a financial literacy tool — something that can be taught in schools, colleges, and community workshops. It empowers people to instantly compare investment options, whether it’s a fixed deposit in Srinagar, a cooperative scheme in Anantnag, or a mutual fund invested in Indian markets.

 Real-life examples for Kashmiri investors

A 6% bank FD means savings double in 12 years.

A 9% mutual fund SIP doubles wealth in 8 years.

A 12% stock market portfolio doubles money in just 6 years.

This shows why even a small difference in returns matters greatly over the long run. A household in Sopore or Pulwama choosing a 9% product instead of 6% could see their money double in four years faster.

Limitations of the Rule

Financial planners caution that while the Rule of 72 is powerful, it is most accurate for rates between 6% and 12%. If you are calculating returns at very low levels (like a savings account at 3%) or unusually high ones (above 20%), the results may not be precise.

Still, as a rule of thumb, it remains one of the easiest ways to appreciate the role of time and compounding in wealth creation.

Question and Answer

Q: Many Kashmiris keep their money in bank deposits. Does the Rule of 72 suggest this is a weak strategy?

A: Bank deposits are safe, but the Rule of 72 shows how slow they are in wealth building. At 5–6% returns, doubling takes 12–14 years. If inflation averages 6%, your “doubled” money buys the same goods as before.

Q: So where should a young Kashmiri start investing?

A: Mutual funds and SIPs are good starting points. At 10–12% average returns, money doubles in 6–7 years. Even small contributions can grow substantially with time.

Q: Can this rule motivate students and first-time earners?

A: Absolutely. Once they see how Rs 5,000 a month compounds over years, they begin to understand that investing early is more important than investing big.

Why timing matters

The Rule of 72 also explains why **starting early** is crucial. Suppose a 25-year-old invests Rs 1 lakh at 12% returns. It doubles every 6 years:

Rs 2 lakh at 31

Rs 4 lakh at 37

Rs 8 lakh at 43

Rs 16 lakh at 49

Rs 32 lakh at 55

But if the same person delays and starts at 37, they will have only Rs 8 lakh by 55 — four times less.

The bottom line

The Rule of 72 is not just a mathematical curiosity; it’s a reminder that time + returns = wealth. For Kashmiris, where awareness about modern investment options is still growing, this simple formula can spark financial discipline and smarter choices.

As one Srinagar-based planner summed it up: “The earlier you let compounding work for you, the sooner you can see your money double. The Rule of 72 is the easiest way to prove it.”

Rule of 72 at a glance

6% return  doubles in 12 years

8% return  doubles in 9 years

10% return  doubles in 7 years

12% return  doubles in 6 years

15% return  doubles in 5 years