HOW MANY YEARS DOES IT NEED TO

MAKE MONEY 10 TIMES?

BY: NINE MILLION DOLLARS

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 How Many Years Does It Need To Make Money 10 Times?

In India, most investors are keen to know while taking investment decisions that how many
years will it take for their investments to get double, triple, quadruple (four times) or infact TEN
TIMES...? In this article, we would see the time frame in which you can make your money
double, triple, quadruple and ten times. This will help you to get an idea which asset you should
choose depending upon your risk appetite and you would also have a proper picture as to how
many years you need to wait to make your money 10 times which is a dream for any investor

Performance of SENSEX

Before moving forward, let’s analyze the past history of Sensex (stock markets) since inception
i.e April, 1979. This is done to know how much return we should assume to make our
calculations. Sensex since its beginning has delivered a stunning 17% annualized returns from
past 33 years. Adding more to your knowledge, Sensex values were:

 100 in Year 1979 on its inception

 900 and in Year 1990
 4000 in Year 2000
 20509 on 31st Dec, 2010

In the table given below, we can look at the Sensex returns in the past 10 years and since
inception:

Sensex Values Sensex Values (End) Returns

(Beginning) (Annualized)
Last 10 Years 3262 (1ST Jan 2002) 15454 (31ST Dec, 2011) 17%
Since Inception 100 (1ST April, 1979) 15454 (31ST Dec, 2011) 17%
in 1979 (32.5
Years)

Simply, investing in mutual fund index schemes in Jan, 2002 would have given compound
annual growth rate (CAGR) returns of 17% by investing till Dec, 2011. From the above table, we
may assume that Sensex has delivered a stunning 17% CAGR returns in the past 10 years and
since its inception (beginning). So we are assuming 17% rate of return in equities calculations

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How Many Years You Need To Make Money Ten Times

Let’s learn how to calculate time required to make money double, triple, quadruple or ten times
the invested amount. Consider Puja is investing in fixed deposit (FD) scheme and Tripti in
equity/mutual fund scheme. Let’s see who has more chances of making money 10 times quickly:

Double the Money

Use rule of 72 which helps in defining the time required to double the money invested. Just
divide 72 by expected rate of return and you will get time (in years) required to make money
double.

Fixed Deposits: So for PPF or FD, it would take 8.5 years to make money double assuming
8.5% returns (72/8.5)

Equity Mutual Funds: In case of equity mutual funds, it would take 4.2 years to make your
investment amount double assuming 17% annualized returns (72/17)

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Triple the Money
Use rule of 114 which helps in defining the time required for making the money triple or three
times the money is invested. Just divide 114 by required rate of return and you will get the
answer for time required to make money three times.

Fixed Deposits: So for PPF or FD, it would take 13.4 years to make money triple assuming
8.5% returns (114/8.5)

Equity Mutual Funds: In case of equity mutual funds, it would take 6.7 years to make your
investment amount triple assuming 17% annualized returns (114/17)

Quadruple (Four Times) the Money

Use rule of 144 which helps in defining the time required for making the money grow 4 times or
quadruple your investment money. Just divide by 144 by required rate of return and you will get
the answer for time required to make money 4 times

Fixed Deposits: So for PPF or FD, it would take almost 17 years to make money quadruple
assuming 8.5% returns (144/8.5)

Equity Mutual Funds: In case of equity mutual funds, it would take 8.47 years to make your
investment amount quadruple assuming 17% annualized returns (144/17)

Ten Times the Money

Use rule of 240 which helps in defining the time required for making the money grow 10 times of
your investment money. Just divide by 240 by required rate of return and you will get the
answer for approx time required to make money 10 times

Fixed Deposits: So for PPF or FD, it would take 29 years to make money ten times
assuming 8.5% returns (240/8.5)

Equity Mutual Funds: In case of equity mutual funds, it would take 14.6 years to make
your investment amount ten times assuming 17% annualized returns

(240/17)

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Table with Ten Times Money

Another important aspect to analyze over here is that fixed deposits took 29 long years to make
money 10 times where as equity took 14.6 years to make money 10 times as per the table. Now if
you invest in equities for 29 long years (which is the time which fixed deposit take to make
money 10 times), you would get your money 94 times the money invested in 29 years against 10
times in fixed deposits

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How Many Years Did HDFC Top 200 Mutual fund Took To Make Money 10 Times

(Moving Forward: Performance Shown from the Date of Fund Inception to the
Date when it Made Money 10 Times)

HDFC Top 200 scheme was launched in Aug 1996 with NAV of Rs 10 per unit and by Mar 2007
NAV crossed Rs 100 per unit which is ten times the investment. Take an example, you invested
Rs 1,00,000 in Aug 1996 grew to Rs 10 Lakhs by Mar 2007 which is ten times the invested
amount in 10 years 7 months (approx).

How Many Years Did Reliance Growth Mutual fund Took To Make Money 10 Times

(Moving Backward: Performance Shown Till Today i.e NAV of Rs 430 From the
Past from where it Made Money 10 Times when NAV was Rs 43)

Now in this case, we would show you one more mutual fund, Reliance Growth Fund whose
performance would be shown till today from a period when it was 1/10 of the today’s NAV
(means if today’s NAV is 430, we would show you a period from when it was having a NAV of 43
which means 10 times the money invested). It took 9 years i.e June 2003 to August 2012 to
make money 10 times for Reliance Growth Fund

Earlier the fund also made money 10 times in less than 4.5 years (June 2003 to Dec 2007 during
the bull run of Year 2007). This scheme achieved all time high NAV of Rs 546.5 per unit in Nov
2010 which means 12.5 times the money invested inside 7 odd years.

We have explained it in the figure given below, your investment at NAV of Rs 43 per unit in June
2003 grew 10 times till today Aug 2012, a period of 9 years

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Conclusion

Time for Money to Get PPF/FD (8.5%) Equity (17%)

Double 8.5 Years 4.2 Years

Triple 13.4 Years 6.7 Years

Quadruple 17 Years 8.47 Years

Ten Times 29 Years 14.6 Years

Remember rule of 70 which states people who don’t invest will have the effect of inflation on
their money. Divide 70 by the inflation rate (assume 7%) to know how long it would take for your
money to be reduced to its half of its today’s value. In such case, your money would become half
its value in 10 years (70/7).

Past 33 years has seen many wars, scams, recessions, droughts etc. in India but still Sensex was
able to deliver ~17% CAGR to investors

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Now the Decision is Yours:

 Whether you want to invest in fixed deposits which make money 10 times in 29 years?
 Or Invest in equities to make money 10 times in 14.6 years?
 Or Want to keep it idle to let it become half in 10 years?

Do your homework (research) and analyze your risk taking capability while investing. Have a
safe investing journey….!!!!!

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