How to Double Your Money: 8 Real Ways to Boost Income and Savings
The idea of doubling your money might sound like a pipe dream, but if you’re patient enough, it’s a plausible feat.
June 7, 2022
This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.
If someone told you they could teach you how to double your money, you’d probably roll your eyes and move on. While there’s no magic formula for waking up tomorrow morning with twice as much money as you have today, it may be possible to achieve a sizable return if you commit to a long-enough investment time frame.
Still not convinced? We’ll outline eight ways you can double your money over time, no matter how little you’re starting with.
How to double your money: 8 ideas
When it comes to something as complex as personal finance, there’s rarely one solution that works for everyone. The way you choose to grow your money comes down to personal preferences, your risk tolerance and how long you’re willing to wait to see returns.
Between the eight ideas below, you should be able to find something that suits you. However, it’s best to talk to a financial advisor if you’d like advice tailored to your specific circumstances.
1. Save in interest-bearing accounts
If you want to minimize risk when trying to grow your money, consider high-yield savings accounts and other interest-bearing accounts. While the low interest rates might make it seem unlikely you’ll double your money, it is possible if you wait long enough. Thanks to compound interest, the interest will earn interest, leading to exponential growth.
There’s a formula you can use to work out how many years it will take you to double your money (as long as you know your rate of return). This formula is called the rule of 72.
The rule of 72 is simple enough: just divide 72 by your annual rate of return. To give an example, if you had a 2% return, you’d divide 72 by 2, suggesting it would take 35 years for you to double your money.
You may also be able to apply this rule to investment products, but unlike interest-bearing accounts, they’re less likely to offer a fixed interest rate. This means you’ll have to choose a rate of return based on past performance or projections, which is less accurate and there is always a risk of investment loss
Also, bear in mind, the rule of 72 is less accurate for higher rates of return.
2. Invest in the stock market
If you’re looking to double your money, it’s probably crossed your mind to invest in the stock market. But exactly how do you go about this?
There’s plenty of choices here, but if you’re a beginner, you may want to consider putting your money into a diversified investment product, such as an ETF, index fund, or mutual fund. Because these funds contain a wide range of companies and assets, they carry lower risk — some companies might go down, while others perform well.
People often agonize over the perfect time to buy for maximum growth. However, an investing strategy called dollar-cost averaging takes the guesswork out of it. You simply invest a set amount each month, meaning you’ll take an average of the market’s highs and the lows. Since the S&P 500 has an average return of 10.7%, your money has the potential to increase over time.
3. Work a side hustle
Investing in the general sense just means putting your money into something that will allow it to grow. This doesn’t necessarily have to mean financial products — it can also encompass investing in something like a business.
For instance, if you make jewelry, you might invest $1,000 into purchasing some specialist equipment that will allow you to make more jewelry. While you’re down $1,000 right now, with the help of the machine, you could make thousands of dollars in the future.
Even if you don’t have enough time to start the world’s next business empire, there are a few side hustles you may be able to fit into your schedule.
Some ideas include:
Freelancing (e.g., web development, writing or graphic design)
Teaching English (or another language) online
Creating content that drives ad revenue (e.g., YouTube videos)
Driving for a delivery service, like Instacart or DoorDash
Selling handcrafted items through an Etsy shop
Driving for Uber or Lyft
These are a few ideas, but there are many, many more. To figure out what’s right for you, assess your skills, decide how much time you can set aside for your side-venture and how much money you can afford to spend upfront. You might want to prioritize side hustles that allow you to create passive income, such as making YouTube videos (where you continually earn ad revenue from old videos).
4. Take advantage of 401(k) employee matching
Many companies offer an employer match on 401(k)s, meaning your workplace will add to your contributions. Since you could earn even more once you consider the returns on your investment, this is one of the easiest ways to double your money.
Some employers will only match a percentage of your contributions — e.g., matching 50% of the money you contribute to your 401(k) — while others will offer a 100% match. Some may impose other limits on matching as well, like only matching your contributions up to 6% of your salary.
For example, your employer might match 100% of your contributions up to a limit of 10% of your salary. So, if you’re earning $3,000 a month and contribute $300 per month to your 401(k), your employer would add another $300. Money doubled, instantly.
5. Sell your possessions
Some figures suggest the average U.S. household has 300,000 items, so chances are you’re sitting on a few things you could sell. You could take things one step further by flipping items you find elsewhere, such as clothes from thrift shops.
This can be an easy way to double your money since you already have everything you need to get started. Potentially, you’ll only have to spend a small amount on packaging materials and setting up an online presence. You can consider selling items on sites like Craigslist, eBay, Poshmark and Vinted. Or you could hold a good old fashioned yard sale.
6. Invest in real estate
Real estate has long been seen as a kind of safe haven in investing since housing is a necessity.
Considering house prices in the U.S. increased by 18.8% in 2021, the down payment you put down really can double in value eventually. Naturally, you’ll also face expenses along the way, such as mortgage interest charges and home maintenance, which can slow down the money-growing process.
7. Invest in cryptocurrency
As with stock trading, you can buy and sell cryptocurrencies to try and secure profits. If you look at the bitcoin price chart historically, you’ll see big swings that would make it possible to grow your money if you trade at the right times. At least that’s the theory. In practice, “timing the market” is very difficult and highly risky.
As such, while there is the potential for high returns, the crypto market is known for its volatility, and some question whether it’s a bubble just waiting to burst. So, crypto investing is a high-risk option for more reasons than one.
8. Pay off your debt
If you’re focusing on earning more money while ignoring your debt, the interest charges you face may end up eating into any returns you might be making — you might even end up with a negative growth rate.
In some examples, you could double your money in real terms just by paying off debt. For instance, if you’re earning $2,000 a month after tax but have to allocate $1,000 of this to your loans, clearing the debt would leave you with $2,000 a month instead of $1,000.
Once you’ve tackled your debt, your cash flow will improve, and you can use the money you were putting toward your debt to invest in some of the other ideas outlined above.
You might be able to double your money with time
There’s no shortage of possibilities when it comes to potential ways to double your money, although some involve significantly more risk than others. Above all, the biggest message here is that money can feasibly double if you let it grow for long enough.