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3 Ways To Double Your Money

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3 Ways To Double Your Money

Doubling your money is a goal that many investors have. Unfortunately, many of the strategies and methods out there are too good to be true. However, there are legitimate ways you can double your money without having to take unnecessary risks or win the lottery.

Here are three ways to invest money properly.

Earn It Slowly

The most traditional way to add to your nest egg is tried and true, but it does take time. This method requires you to invest in a stable, non-speculative portfolio that is diversified between stocks and bonds. While your money won’t double in a year, you can expect your money to double every seven years, if you are investing in a stock that has a return of roughly 10% annually.

To calculate how long it will take your money to double, you can use the rule of 72. Using this rule, divide your expected annual rate of return into 72. The number you get is how long it will take the money to double.

This rule is especially accurate when calculating with low rates of return, but as the rate of return becomes higher, it becomes less precise. However, it gives you a good baseline on how long it will take to double your money.

If you have savings sitting at the bank, you can use this method to see how much longer it takes to double your money there. For example, Bank of America (NYSE: BAC) has an average rate of 0.09% APY for savings accounts. It would take you more than 100 years to double your money that way.

Know When To Buy

It’s only natural that the stock market fluctuates up and down. One of the times you should buy is not when everyone else is, but when everyone else is selling. This method requires more research, but there might a moment in the stock market when a reliable investment is oversold. You can capitalize on this if you have been watching the market.

One way to calculate whether a stock is oversold is by using the price-to-earnings ratio and book value. When a company falls below its averages, this might be the moment to buy up stock and double your money.

Look At Stock Options

For those who want to find a fast way to double their money, they might want to use stock options. However, the problem is you can lose all your money just as quickly if you aren’t careful.

For those who are in-tune with the fluctuations of the stock market, utilizing stock options can be a great way to double your money fast. With each stock option, it could represent 100 shares of the stock.

That means the company’s price has to increase a small amount for you to make a lot of money. Of course, this can be risky and should only be done if you have done your homework.

MoneyLion has entered into a compensation arrangement with Benzinga under which MoneyLion pays a fee for marketing and advertising services. MoneyLion does not have editorial control over the content of this material.

Posted-In: Bank of America MoneyLionEducation Personal Finance General Best of Benzinga

 

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