According to long-term data from Vanguard, an investment into a simple, diversified basket of local companies (i.e. Vanguard Australian Shares Index ETF, ASX: VAS) has delivered around 9.3% compound annual growth (CAGR) over the past 30 years.
At that rate, your money doubles roughly every 7.7 years. That's thanks to the Rule of 72 †a simple formula investors use to estimate how long it takes for money to double.
Just divide 72 by your annual rate of return:
That means even with average market returns of 9%, an investor who simply stays the course could see their portfolio 5x in less than two decades — without doing anything fancy.
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