How fast can money grow?
- Will Rainey
- Sep 27
- 5 min read
If you’ve read my previous blogs or your kids have a copy of my book, Grandpa’s Fortune Fables, you’ll know that I believe kids should learn that money can grow from a young age.
If they learn that money can grow, it gives them a massive advantage in life, as most kids grow up only seeing money for spending (sadly).
In this blog, I share a discussion with my kids about: “How quickly can money grow?”
This is a super important question, as it helps set their expectations and also protects them from scenarios where people offer unrealistic opportunities to grow their money very quickly, i.e., it helps them avoid scams.
For this blog, I have focused on money growing through the stock market, as that’s how we help our kids' money grow. I discuss how fast money can grow via other methods later.
👉 Learn more: How to teach kids about the Stock Market
Time to double your money …
Rather than talking about growth in terms of percentages, I asked my youngest daughter:
How long do you think it would take for your money to double from £100 to £200?
I gave her the choices of:
3 months
1 year
4 years
8 years
13 years
[I suggest you ask your kids this same question]
It took her a long time to think, but then she said 1 year … oh dear!
After my initial surprise at her answer, I could understand why she might have thought that. I’ve spoken to my daughters about the need to be patient with money and that if someone tells you money can grow quickly, it’s probably a scam. However, I hadn’t spoken much about how fast money can actually grow.
Rather than just telling her that 1 year was too fast, we did some maths to work out how much she’d have when she is 18 if it did only take 1 year to double her money. She’s just turned 11.
11: £100
12: £200
13: £400
14: £800
15: £1,600
16: £3,200
17: £6,400
18: £12,800
As we went through this, she could tell that 1 year was too quick and changed her answer to 8 years.
8 years is the correct answer back on historical returns from the stock market.
I explained that the time it takes depends on where you put your money. She was ok with that, but then I thought I’d get her a bit more excited.
Time speeds up the longer you wait …
My follow-on question was …
How long would it take to get the next £100, i.e. go from £200 to £300?
I’m pleased to say she didn’t say 8 years (that’s how long it would take to double to £400). Instead, she guessed 4 years.
It was a reasonable guess. The actual answer is about 4.7 years. Regardless, she was happy that it would take a lot less time to get the next £100.
We continued to discuss how long it would take for each subsequent £100 from her initial £100:
First £100 (from £100 to £200): ~8 years
Second £100 (from £200 to £300): ~4.7 years
Third £100 (from £300 to £400): ~3.3 years
Fourth £100 (from £400 to £500): ~2.6 years
Fifth £100 (from £500 to £600): ~2.1 years
Sixth £100 (from £600 to £700): ~1.8 years
By this point, she was starting to see the magic: the later £100 chunks came faster and faster, even though nothing new was being added.
That’s the power of Compound Interest (a topic we’ve spoken about before). At first, it feels slow, but once it gets going, growth speeds up like a snowball rolling down a hill.
The Rule of 72
The estimated time to double your money is 72 divided by the expected return.
For example, if you expect a 9% return per year, then it will take about 8 years to double your money.
This is similar to the stock market, which has averaged around 8% to 10% return per year, so about 7 to 9 years.
Returns from other types of investments
The above is based on investing in the stock market. I discussed other investments with my daughter.
A savings account at 4% per year would take about 18 years to double.
Property at ~6% return per year would take about 12 years.
The property example is interesting. You often hear stories like: “My parents bought a house in 1980 for £23,000 and just sold it for £270,000.” That sounds incredible, as that is a 12x increase! But that’s over 45 years, which people don’t always think about. That works out to just 6% per year.
If that £23,000 had been in the stock market at 9% per year, it would have grown to over £1.1 million.
Of course, some property in certain places has grown faster than 6% per year. I’ve just looked at the average UK property prices over the long term.
What is too fast?
I want my daughters to use '8 years' (or 9% per year) as a benchmark to question if they are offered an investment opportunity which is materially higher than this. This can help them avoid scams, as many scammers start by offering their potential victims offers of doubling their money very quickly.
Always be mindful when someone says you can double your money in less than 8 years!
A high potential return doesn’t always mean it is a scam. For example, Crypto (Bitcoin) has doubled investors' money much faster than 8 years. The average returns have been extremely high. If we look at Bitcoin, the average returns have been 80% to 90% per year since it was created in 2009.
Are these returns sustainable? Who knows! What we do know is that these types of investments come with very large risks, which could mean you lose a lot of money, so you need to be careful and spend a lot of time understanding them before investing.
👉 Learn more: The Stock Market vs Crypto
Of course, if your kids are keen to grow their money faster, there is no limit on how quickly they can earn money. I would strongly recommend you tell them the story about the $5 challenge a university professor set for their class, as this shows that you can double or triple your money if you think outside of the box.
Not a smooth ride
One thing I highlighted to my daughter is that her money won’t grow smoothly. Sometimes it might take less than 8 years to double. In fact, her money has nearly doubled in less than 5 years, thanks to positive returns in the stock market (at the time of writing).
But if there are “big storms” (our term for stock market crashes), it could take longer. The 8 years is just an average.
👉 Learn more: 6 Ways to Think About Risk Differently
Start the conversation with your kids
Ask your kids: “How long do you think it would take for your money to double?”
The most important thing is to talk to your kids about how money can grow. It really can change how they see money and put them on the path to becoming financially healthy and wealthy.
As highlighted in this blog, it’s also important to talk about how quickly money can grow, to manage expectations and help them avoid scams.
👉 What to read next:
How to Teach Your Kids About the Stock Market [Essential]
Avoid These 3 Money Sayings [Popular]
Next week, I’ll be sharing lessons from one of the wealthiest people to have ever lived, John D Rockefeller, which I’m sure your kids will enjoy. Make sure you subscribe so you don’t miss it.
Thanks for reading — please help share this with other families who are teaching their kids about money. Also, if you could like/comment on this post linking to the blog on LinkedIn, that would be amazing!
Will
P.S., If you want fun stories to help your kids start to grow their money, grab them a copy of Grandpa’s Fortune Fables (available on Amazon or as part of the Wealthy Kids Program).
