the long term

Investment Advisors like to talk about returns in the long term. By long term I generally mean somewhere between "more than 10 years" and "pretty much forever." We talk about the long term for good reason. In the short term, stock investments can swing in any direction - from the dark days of 2008 (S&P 500 down 37%) to the bounce the next year (up 28%) to a boring 2011 (barely up 2%) to the puzzlingly exhuberant 2013 (roaring up over 32%!). It just doesn't make sense to talk about what might happen in the next year or two. Looking back further the S&P 500 is generally cited to have average returns of about 7% a year (that happens to be bang at where returns have been for the past 10 years). But again, we don't know what will happen in any given year, only that the long term has been good.

We also talk about the long term because your biggest financial decision is a long term decision - retirement. The decision to end your income and rely on what you have saved is a huge decision that you can look forward to from your first paycheck.

It is also the long term that is your greatest helper when trying to reach that goal.

Returns can vary year to year, but thanks to compounding, having a positive return for a longer period is always better than that same return over a shorter period.

For example, at the oft-cited 7% return, $1 saved up for 20 years would turn into $3.87. If that is short of your savings goal, you need to adjust one of two things - the return or the time. To double this in the same time period, you would need a return near 11%. While the stock market has had plenty of 11%+ years, the long term average is still only 7% and you are unlikely to find 4% of outperformance that persists for 20 years.

The easiest way to double your money is just to wait. At the same average return on 7%, waiting another 10 years - or better yet - starting 10 years earlier, would turn your original $1 into $7.61. Chasing higher returns not only improbable, but is probably risky as well - but fortunately, time is on your side.

So there you go - the easiest way to double your money is just to wait. The more time you give yourself to save, the more you will have. Get started saving and investing as soon as possible!