In the world of finance, the allure of quick riches often tempts individuals to take drastic measures. One such story is that of Ashley Revell from London, whose impulsive decision in 2004 highlights both the thrill and danger of high-stakes gambling.
Revell’s journey began during a casual night out with friends, leading him to contemplate a wildly ambitious idea: to sell all his belongings, fly to Las Vegas, and bet everything on a single spin of the roulette wheel. While this notion may seem outrageous (and it certainly is), Revell followed through on his plan.
Over six months, he liquidated his possessions and made his way to the Plaza Hotel and Casino in Las Vegas. Surrounded by his parents and a film crew, he placed an unprecedented $135,300 on red one sunny April morning in 2004.
“That moment was the most exhilarating of my life,” Revell recalled in an interview years later. “It’s a cliché, but time really did stand still. I felt completely calm because I had put in all the effort beforehand.
“I had sold everything, had no possessions left. My decision was either red or black, and there were no further choices to make – it was an incredible feeling of liberation.
“As the ball bounced around and came to a stop, I thought it landed on red but lost sight of it momentarily. When the wheel came back into view, I saw it resting on number seven. It was red!
“A small crowd had gathered, and they erupted in cheers. I joined in the celebration as someone brought out a bottle of champagne. My family and friends were ecstatic. I had won £153,680 [$270,600]. It was an utterly surreal moment filled with joy.”
Gambling is Not the Answer
Revell’s luck was extraordinary, but he could have just as easily faced complete financial ruin with his gamble. Had luck not favored him, he would have been left with nothing but regret.
Clearly, this approach to doubling one’s money is reckless. Luckily, there are far safer and more sensible alternatives. You can grow your finances without stepping into the casino or risking everything on a single bet. In fact, avoiding gambling altogether is advisable.
Instead of wagering your funds, consider investing in the stock market for sustainable growth over time. While this method may lack the thrill of Revell’s experience and might sometimes feel as dull as watching paint dry, it is undoubtedly more prudent and responsible.
For instance, the geometric average return—accounting for losses—of the S&P 500 from 1965 to 2014 is 9.84 percent. Keep in mind that this is a long-term average; the market can experience downturns that may last for years. Thus, the stock market is not suited for short-term savings or emergency funds.
Nonetheless, the potential for achieving solid single-digit returns is what makes investing in stocks a viable strategy for growing your savings for retirement, especially when compared to a traditional bank account offering interest rates below 1 percent.
However, to truly double your money, a 100 percent return is required, not just the 9.84 percent average. So how can you potentially achieve that with stocks?
Strategies to Safely Double Your Money
As the popular saying attributed to Albert Einstein goes, “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”
While no concrete evidence exists that Einstein actually said this, the sentiment rings true: compound interest is a powerful tool. When it comes to compounded stock market returns averaging 9.84 percent, your money can double quicker than you might expect.
To estimate how long it will take, use the ‘rule of 72.’ This straightforward formula allows you to calculate the time it takes for an investment to double at a fixed annual compounded return. Just divide 72 by your expected annual return, and you will get a rough estimate of the years needed for your investment to double.
For example, if you invest $100 at a 9.84 percent return, it will take approximately 7.3 years (72 divided by 9.84) to reach $200. While this timeframe is significantly longer than the immediate double achieved through a roulette spin, it is also far more secure.
Ultimately, seven years will pass quickly. By investing through a low-fee S&P 500 index fund and allowing the returns to accumulate, you can reach your goal of doubling your money. With an ear for emerging opportunities, you might even double your investment in five years or less.
These are the kinds of opportunities we strive to identify and share with you as they arise.
Sincerely,
MN Gordon
for Economic Prism
Return from How to Safely Double Your Money in No Time at All to Economic Prism
