Last week was a rollercoaster for the share market, with shares of some big names in the S&P falling. However, Xero Limited (ASX: XRO) keeps soaring high.
Currently, its shares are running at a high of 12.27%, from $78.62 on March 8, 2023, to $89.99. Meanwhile, the ASX 200 index has slid by 3.75%.
If you invested $1000 in Xero shares a couple of weeks ago, you would have got 12 shares with $56.8 cash left over.
Now the trading price is at $89.9. This means selling 12 shares; you would have got $1078.8.
So you would have earned a total of $135.6, i.e., a return of 14.2%. You could have easily doubled your gains if you had increased the investment.
Use the Rule of 72 to double your money
It’s not that hard to double your money through investment. The key is to make a suitable investment at the right time at the right thing. However, everyone wants to know when their money will be doubled.
There is an excellent tip to know that. Use the Rule of 72.
The Rule of 72 is a simple trick to estimate how quickly your money will be doubled.
The Rule is dividing 72 by the annual rate of return.
For instance, if you earn 10% as an annual return, your money will be doubled in:
72/10= 7.2 years.
The higher the returns, the faster your money will double.
The only issue is that the returns of financial markets can fluctuate. Your return can go significantly higher or lowers. However, at least you can minimize the loss by keeping an eye on the market.
Tips to double your money
Open an 401(k) plan
A 401(k) account can make your dream comes true. It is the easiest way to double your money at very low risk. In this, you invest a little money every month, and your employer will deposit a small percentage of what you add into the account. If you put in 10% of your salary, your employer will add another 10%.
The only downside is your company will ask you to retain your employment for a specific time.
Invest in S&P 200 & 500 index fund
An S&P index fund gives you a faster return than standard mutual funds and 401(k) plans. In comparison, a stock fund may be a bit riskier, but not much as investing in a single stock for a long time. Besides, the S&P 200 comprised America’s top 200 profitable and most prominent firms. So, it is also a good choice for long-term investment.
For instance, Xero shares are at a 12% return rate today. This is a pretty high return if you compare the annual return percentage of other financial instruments.
Buy a home
Real estate has a reputation for its slow and steady returns. However, financial transactions are usually structured through a mortgage. Homeowners usually rely on leverage (mortgage) for the purchase.
Suppose you buy a $200,000 home with a 20% down payment. That means you will pay $20,000 as the down payment. So, if your house value increases only by 20 percent, you will get your money back in double. If your house value rises to $240,000, you will have a total income of $40,000. This is double the amount of the down payment.