The rule of 70 explained

20122013

InvesterJones said:

20122013 said:

masonic said:

https://en.m.wikipedia.org/wiki/Half-life

Obviously here we are running it backwards to get a doubling time but the principles are the same.

It is great to have the explanation.
For retirement planning/ budget / forecast what would be the basic calculations / knowledge useful to have? 
Eg percentage, ... what terminology or phrases to use to look things up 

Retirement planning is so individual it's hard to generalise much. There's a pensions board on the forums with more useful advice, but basically you need to project how long you want your assets to last, then model how quickly they will be depleted against how quickly they will grow (if at all). https://www.retirementlivingstandards.org.uk/ has some useful information around potential costs. Remember inflation applies to costs, and investment performance applies to assets. But remember past performance is no guarantee of future (hence why general rules such as 3-4% drawdown aren't so helpful unless you are sure you're in the same environment as the data used to model them - low inflation, relatively high investment performance).

You are right that it is individual, hence, I am interested to learn more about relevant calculations and terminologies using different approaches so I can check my numbers and work backwards.

Some online websites have given me a number for my final pot,  but I want to be able to use different calculations to do my own forecasts.  I will start with understanding how to calculate interests, compounding and then tax and CGT. (then will work out pension withdraws etc)  these maybe basic but I would need to understand these first.

kempiejon

I think it's helpful to calculate ones own numbers based on expenditure. I update records as to what my actual expenses are and used those actuals to make some assumptions about required future income. If one wanted to buy an annuity to provide that income then I suppose one needs a capital amount for that pot, of course that number would be in flux. My 15 year plan was to become financially independent when my investment returns met my expenses, most years my returns grow. 

masonic

Thank you ChatGPT. Both rules have been largely deprecated by the widespread availability of calculators.

EthicsGradient

masonic said:

Thank you ChatGPT. Both rules have been largely deprecated by the widespread availability of calculators.

I was going to say - for "financial or economic analysis", I'd expect the analyst to do, say, "ln 2 / ln 1.055" on a calculator, to work out the time for 5.5% growth to double. Or to have more needs than just "time to double". The prose may be AI-generated, but comes from "smartasset.com" (republished on Yahoo/AOL), which has managed to become a $1 billion-valued company with stuff like that, according to Wikipedia. SmartAsset - Wikipedia