Well, there is the handy “Rule of 72″, which says the number of years it takes for the money to double at x% yearly (compounded) rate is roughly 72 divided by x. For example, if you have $10,000 in a money market fund earning a sedate 5%, it will grow to $20,000 in about 14 (=72/5) years. By contrast, if the same $10,000 is invested fully in a stock fund that appreciates at a healthy 10% (not a fairytale), doubling your kitty should take only 7 years.

In real life though, the 10% growth in stock fund refers to the market trend, and the actual stock prices bounce up and down around this trend on a daily, weekly, monthly, yearly and even multi-yearly basis (my last post goes a little deeper into it). So, if you are unlucky to hit a major market crash near the end of that 7-year period, your asset can deplete quickly (as a recent example, the S&P500 Index dropped a frightening 21% in a single day on Oct 19, 1987).

The key to answering “how fast should my money grow?” is therefore to ask yourself “how soon would I need money?” If you are retiring soon, or planning to buy your next house within the next few years, you are better off with less-risky options such as a money market fund, or an online money market account. These investments carry almost zero risk, but the earning is also low (still, 5% is not bad considering you will sleep easy).

On the other hand, if you are not looking to touch your nest egg for several years, investing heavily in stocks with a well-diversified portfolio (to minimize risk) can help you net a tidy profit over long term. In either case, there is no fast way to grow money - you earn low yield over short-term, and high yield only if you invest over long-term. Healthy investment is a notoriously dull activity, and requires lot of patience. Paraphrasing Paul Samuelson (The Ultimate Guide to Indexing): “Investing has all the excitement of watching paint dry, or grass grow”.