5 ways to double your money


Do you want to double your money? With interest rates so low, it’s hard to use a bank account to make any significant amount these days. For investors to double or triple their money, they often have to take some risk for that potential reward.

To achieve this level of return over time, there are a number of options that come with limited risk. Meanwhile, those looking to get the lights out and double their money quickly have their share of high-risk, high-reward options to choose from.

Below are five possible ways to double your money, from low risk to highly speculative.

1. Get a 401(k) Match

Talk about the easiest money ever! There’s no easier or less risk of doubling your money than taking advantage of the employer match on a 401(k) account. You can then use the plan’s tax benefits to increase your retirement savings.

Many employers give money to employees just to contribute to their own retirement account. For example, employers may match a small percentage of what you add to your account — so you put in 5 percent of your salary, and your employer adds another 5 percent. It’s the easiest, least risky way to make money, and you still get all the great benefits of a 401(k) plan.

If there is a downside, it is that some companies require you to remain employed for a certain period, often three or four years, before the funds are fully vested.

This 401(k) calculator can help you figure out how much wealth you can build for retirement.

2. Invest in an S&P 500 Index Fund

Index funds based on the Standard & Poor’s 500 Index are one of the more lucrative ways to double your money. Investing in stock funds is riskier than bank CDs or bonds, but it is less risky than investing in certain individual stocks. Plus, the S&P 500 is made up of about 500 of the largest and most profitable firms in the US, so it is a strong choice for long-term investments.

The S&P 500 also has attractive long-term returns, averaging around 10 percent annually over the long term. This means that on average, you will be able to double your money in just seven years. That said, returns are likely to be much higher — higher or lower — than average in any given year. And the S&P 500 could also go through a longer losing streak. For example, the index had negative returns during the 2000s. The S&P 500 returned 252 percent for it in the 2010s — more than three times that.

Buying an S&P 500 index fund is easy and as such you don’t need much expertise to invest.

3. Buy a House

Given its reputation for slow and steady profits rather than explosive growth, real estate may not seem like a way to double your money quickly. But if you look at how most transactions are structured using a mortgage, you’ll quickly see that buying a home can cost twice as much.

Doubling your money by buying real estate can actually be relatively easy. That’s because homebuyers often rely on the power of leverage — that is, a mortgage — to make a purchase.

For example, imagine buying a $200,000 home with the typical 20 percent down payment. You’ll put in $40,000 (and we’ll exclude closing costs and similar expenses). How much should your home’s value increase to double your money? Only 20 percent. When the value of your home rises to $240,000, you’ll receive a principal of $40,000 and a capital gain of $40,000, for a total profit of 100%. That is the power of leverage.

Of course, unlike other investments here, you’ll be forced to invest more money to keep your home on good repairs, current on property taxes, and continue paying the mortgage. That means a greater outlay of money, but otherwise you’ll have to pay rent, and being the owner supports you.

4. Trade Cryptocurrency

The volatility of cryptocurrency – be it Bitcoin, Ethereum or Dogecoin – is an opportunity for speculators to trade money. Of course, this is also an opportunity to lose money, but it always has its share of trade-offs if you want to double your money quickly.

Although many cryptos have gained momentum over the past year, they can bounce back significantly, making it difficult to halt the decline. When prices fall it can be easy to buy high and sell low and bail out, and you’ll be putting money in someone else’s pocket instead of yours.

It is easy to lose money on cryptocurrency if you cannot manage your position, and there are much easier and less risky ways to double your money.

5. Trade Options

Trading options is one of the fastest ways to double your money – or lose it all. Options can be tempting but can also be quite risky. But to double your money with them, you’ll need to take some risk.

The biggest upside (and downside) of options is when you buy a call option or a put option.

You have the right, but not the obligation, to purchase the stock at a specific price by a specific date upon expiration of the option.

A put option gives you the right, but not the obligation, to sell a stock at a specific price at a specific time at the expiration of the option.

You will pay a price for owning an options contract, and that premium can multiply in value. The downside is that the option may be completely useless. So you don’t want to risk all your money on one throw of the option dice.

Traders also have a choice of low-risk but less-profitable options strategies. And while you’re at it, there’s no reason not to cut your trading costs by going with a top broker.

How soon can you double your money? look at the rule of 72.
Everyone wants to know how quickly he can double his money. There’s a really simple trick that lets you quickly estimate when you can double your money. This is called the rule of 72.

The principle is simple. To find out how long it will take for your money to double, divide 72 by the annual rate. For example, if you earn an annual return of 8 percent, it will take about 9 years to double. So the higher the return, the faster you can double your money.

But remember that this is an estimate, so your number will only give you an approximate number. Also, the bigger issue is that if you are investing in the financial markets, your returns will vary greatly from year to year. This means that your returns are likely to be lump-sum every year which is much higher than average.

Ground level

If you want to double your money in any reasonable time frame, you will need to take some risk. You will not be able to earn enough from secured bank products to reach that goal. Above all, it’s important to remember that you don’t have to make the riskiest trades to make your fortune – they look more like gambling than an investment. You have high-return options that can limit (but not eliminate) your risk, such as a house, S&P 500 funds and matching 401(k).