For Australians navigating the world of investing, the difference between complex math and practical shortcuts can be night and day. Enter the Rule of 70—a deceptively simple formula that helps you estimate how long it takes for your money to double, based on a given annual growth rate. In a climate of changing interest rates, evolving superannuation policies, and an appetite for smarter investing, understanding this rule isn’t just clever—it’s essential.
What Is the Rule of 70, and Why Does It Matter?
The Rule of 70 is a quick mental math tool. It says: Divide 70 by your annual rate of return, and you’ll get the number of years it’ll take for your investment to double. For example, if your investment grows at 5% per year, it’ll double in about 14 years (70 ÷ 5 = 14).
- Simple and fast: No spreadsheets or financial calculators needed.
- Big picture thinking: Great for setting expectations and comparing investment options.
- Works across savings, super, and property: Any scenario with a consistent growth rate applies.
Why does it matter in 2025? With the RBA’s cautious approach to rate cuts and superannuation reforms shifting default investment strategies, Aussies need a reliable way to visualise compounding growth—and the Rule of 70 does just that.
Real-World Examples: How the Rule of 70 Plays Out in Australia
Let’s bring the Rule of 70 to life with scenarios relevant to everyday Australians in 2025:
- Superannuation: Suppose your super fund is targeting an average annual return of 6%. Your super balance would double in just under 12 years (70 ÷ 6 ≈ 11.7). With the government’s 2025 focus on boosting default super performance, this helps you project future balances under different fund options.
- High-Interest Savings: The best online savings accounts in Australia are hovering around 4.5% interest in 2025. At that rate, your savings would double in about 15.5 years (70 ÷ 4.5 ≈ 15.6).
- ASX 200 Returns: The Australian share market’s long-term average return is around 7%. At that rate, your investment would double in a decade (70 ÷ 7 = 10).
These examples don’t just make abstract numbers real—they show you how policy changes and market trends impact your future wealth. The Rule of 70 helps you compare, plan, and make more confident decisions.
Why the Rule of 70 Works—and Its Limitations
The Rule of 70 is based on the mathematics of compound interest. It’s a close approximation derived from the natural logarithm of 2 (which is about 0.693). That means it’s accurate for typical investment rates (between 2% and 10%). For ultra-high or ultra-low rates, the estimate gets less precise, but for most real-world scenarios in Australia, it’s a practical guide.
Keep in mind:
- Consistent rates are key: The Rule of 70 assumes a steady annual return. Market volatility or variable interest can change the outcome.
- It’s a shortcut, not a guarantee: Use it for ballpark planning, not detailed financial projections.
- Inflation matters: The Rule of 70 shows nominal (not inflation-adjusted) growth. With 2025 inflation moderating but still present, consider the real value of your future dollars.
Still, this rule is a favourite of seasoned investors and educators for a reason: it makes the magic of compounding instantly relatable.
Putting the Rule of 70 to Work in 2025
How can you use this tool as you make decisions this year?
- Compare super funds: Use the Rule of 70 to estimate how different default options could grow your retirement savings.
- Evaluate savings accounts: Visualise the long-term impact of chasing higher rates as neobanks and major banks compete for your deposits in 2025.
- Set investment goals: If you want to double your portfolio in the next 10 years, you’ll need to average a 7% return—now you have a clear target for your asset allocation.
The Rule of 70 can also help frame conversations with partners or children about the power of starting early and letting time do the heavy lifting. It’s a teaching tool, a planning aid, and a mental check on whether your investments are working hard enough.
Conclusion: Make Compounding Work for You
The Rule of 70 is a classic for a reason—it’s fast, practical, and gives every Australian a window into the future of their money. With new super policies, interest rate shifts, and growing options for everyday investors in 2025, knowing how to quickly estimate doubling time is a real edge. Don’t let your financial future be a mystery; put the Rule of 70 in your back pocket and let compounding work its magic.
