The Significance of Longevity in Investing
The rule of 72, where we divided the investment RETURN by 72 to see how long it will take to double. In our prior example chart, the average return since 1926 has been 10.3% divided by 72 = 6.99 years... so money invested doubles every 7 years. As longevity increases, there is potential for more doubles...
Why is this important? The last double is the most profound. Someone who dies with a $2M estate at age 79, might have lived to 86, and that last double could mean the estate is worth $4M.
When we invest for the long term, longevity is important as it provides you more time to create (and transfer) that wealth.