How to Double Your Money in a Year

If you could double $1,000 every year for 10 years, you’d be a millionaire. Doubling your money in a year is something that sounds easy when you say it out loud, but when you realize that this means you would have to get a 100% return on your money it doesn’t sound as easy.

If you put your money in the stock market, you’ll be lucky to get 20% on that investment in a year.

So how on Earth could a person invest their money and have a pretty high confidence that they’ll double their money in a year or less? I’m in the process of attempting to double a $100,000 investment and I’ll tell you exactly how I plan to do it in about 9 months. Plus I’ve got a few other ideas to share with you.

These aren’t luck based methods. These are real, repeatable methods to double your money in 1 year.

How Long Does it Take to Double Your Money?

Return on investment is normally measured as compound interest rate. You’ll often hear that you can get 10% in the stock market, and that just means that, on average, over long periods of time, your stock market investments will grow by 10% each year.

I’ve written about the return potential of many investment types, including mutual funds, real estate investing and collectibles. The ROI on the most well known investments can vary from about 1% (with high yield savings accounts) to about 25% (investing in real estate).

But how long does it take to double your money at each ROI level? Let’s take a look.

You can see that in the stock market (average of 10% ROI) it takes about 7 years to double your money.

If you were a very successful stock investor you might get 15-20% ROI on average and double your money in 4 to 5 years.

It’s not reasonable to expect to double your money in a year with traditional investing methods. So how might a person go about doubling their money in as little one year?

Non-repeatable Ways to Double Your Money in One Year

There are lots of ways to double your money in less than a year, but most of them are very difficult to repeat. I won’t be focusing on these non-repeatable ways to doubling your money, because I’m only interested in things that can be consistently repeated.

However, I do want to mention some of these things:

• Gambling (you can double your money in one day)
• Day trading (extremely active stock market investing)
• Highly leveraged Forex trading
• Start a successful company or website

There are lots of these money doubling techniques that require a significant amount of luck. Most of these things can create good returns, but doubling your money is rare.

The ideas I have in this article will double your money more often than not.

How to Double Small Amounts of Money (under $5,000)

There are quite a few creative ways that a person can double small amounts of money very quickly. First, I want to introduce you to the basic idea, then let’s go through some examples/ideas.

Cash on cash return

One of my favorite ways to measure return on investment is with cash on cash return.

Simply put, cash on cash return is the percentage of your initial investment that is back in your pocket after one year. For example if you loaned someone $20 and a year later they had paid back the entire $20, that’s 100% cash on cash return. You got 100% of your initial investment back in one year.

The trouble with that example is that you didn’t actually gain anything.

So let’s instead say that you bought a $20 game for the Xbox. Over the next year you let someone borrow it for a few months. They pay you $20 to rent the game and then they give it back to you.

You got $20 back from your $20 purchase, so that’s still 100% cash on cash return. But this time you still have a game worth $20. So if you sell the game now for $20, you doubled your money in one year.

So there are two ways to double your money looking at cash on cash return.

1. You get 200% cash on cash return (make double your initial investment in one year)
2. You get 100% cash on cash return while retaining the value of your initial investment

Examples of doubling small amounts money

Unfortunately, I can’t tell you exactly how to double YOUR money. I don’t know your exact financial situation. But hopefully I can give you a few examples so that you can figure it out for yourself.

1. Buy modem/router

My internet service provider charges me $15 per month to rent a modem and router. That’s $180 per year. I spent about $250 to buy a modem and router, had them installed, and got rid of the $15 rental fee.

After a year I had saved $180 on my internet bill and still had my modem and router. That was about a 70% cash on cash return, which isn’t quite doubling my money in a year, but it’s close.

2. Replace gym membership

Perhaps you pay for a gym membership. I used to. I think we paid $45 a month for my whole family.

When the pandemic hit, I went to a local store that sells used sporting equipment and got some weights for around $150 and then bought a weight rack online for around $300.

I think it’s now been 10 months since we cancelled our membership and in that time we’ve saved $450 on gym membership fees. Plus I still have all the gym equipment. Doubled our money in only 10 months.

3. Buy a cheap website

We’ll be looking at website purchases a bit later in this article as well, but in a different way.

Young websites today typically sell for 3 times their yearly income. This means if a website makes about $100 per year, then you could be able to buy it for around $300.

If you buy that $300 website and it makes $100 over the next year, you haven’t doubled your money. But if you do your research and work on the site, it’s not unreasonable to manage to triple the site’s income in a year. And that would be doubling your money.

Patterns in doubling small amounts of money

It’s not easy to invest small amounts of money and expect to double it in a year. So the pattern I would look for is things you pay for every month that you can eliminate by buying something.

You probably can’t eliminate your mortgage payment by buying something, but you can probably eliminate your cable bill by buying something. If you spend $60/month on cable, then you could possibly double your money by buying a really nice antenna, or even just by switching to a cheaper streaming service.

Don’t ignore all the free opportunities your might have to increase your personal cash flow by eliminating recurring expenses and making more money doing the things you already do.

How to Double $5,000 to 20,000

Sure you can get lucky and buy a stock that doubles in a year, or maybe you have been fortunate to effectively time another market that’s seen big surges (like cryptocurrency). But I know of one way to double less than $20,000 pretty consistently in a year.

Here’s the kicker though, I don’t think this can be done with very small amounts of money. You’ll probably need to save several thousand dollars. I would guess $3,000 is pretty much the bare minimum you need, because you’ll be buying a house.

If you already read my article about using leverage to build wealth, then you know that one of the most powerful forces of ROI is leverage plus property appreciation.

If you put 5% down on a home, then you are likely to see a return on investment of 70-100 percent in one year on your property appreciation.

Getting 80% ROI from property appreciation

Let me show you how that works.

On average, a single family home in the U.S. increases in value by about 4% each year. So if you buy a house for $100,000 it should be worth about $104,000 in one year.

Let’s say you put 5% down to purchase that house, or $5,000. You spent that $5,000 for $4,000 in property appreciation. That’s 80% return on investment in only one year.

If you could put less than 5% down, you could get even greater returns.

What about mortgages, utilities, etc. ?

You can’t simply buy a house for 5% down and expect to double your money. You’ll have a mortgage payment among other expenses. You can manage these expenses in one of two ways.

First, if you already pay rent/utilities, then you can buy a house that allows you to spend only as much as you currently spend. If your new house’s expenses cost no more than the home your were renting, then you’ll be able to claim the entire 80% of home appreciation.

Second, you can rent the home to cover your expenses. We usually do this by listing the house on Airbnb.

If you can cover your expenses with the rent, then you also get to claim the entire appreciation as your return on investment. Here’s another look at how I measure ROI for real estate investments.

Buying a house for 5% down

Part of the difficulty with this method of doubling your money is that it’s not easily repeatable. Why?

Because you can typically only buy a property for 5% down if you plan on living there. If you buy a property purely for investment purposes, the lender will typically demand a 20-30% down payment. That gives your ROI from appreciation a huge hit (as you saw in the table earlier).

So if you want to repeat this method, you’ll be moving every time you buy a new house.

Getting the money out of the house

The other piece of this puzzle is that your money is stuck in the house at the end of the year. You can’t exactly pay for your dinner with the value of your home.

There are a few ways to get that money out of your house.

1. Sell the house
2. Take a second mortgage on the house
3. Cash out refinance

Again, not easy to access the money, but those are your main options. You can also consider some more alternative ways to get equity out of your home.

How to Double $20,000 to $1,000,000

Now we’re getting into my current territory. I’m trying to double about $100,000 right now, so I’m going to share exactly how I plan to do it.

This year I’m going to buy a company with an SBA backed loan.

How much does it cost to buy a business?

Businesses are generally valued based on their yearly income. You can usually buy a business for 2 to 5 times its yearly income.

So if a business makes $100,000 per year, then you can usually buy it for between $200,000 and $500,000. But remember our special friend, leverage. You don’t have to put up all that money yourself, you can get a loan!

The Small Business Administration guarantees loans to buy businesses (among other things) and you can put 10% down on an SBA loan.

So you can realistically buy a business that makes $100,000 per year for $20,000 to $50,000 of your own money.

Calculating ROI of a business purchase

All you would have to do is maintain the business’ income level and you’ll be doubling your money in less than a year. Let me show you how it works.

Let’s assume that we can buy our business making $100,000 for $350,000 with an SBA loan. That means we must put $35,000 down, and we take on a loan of $315,000.

Since SBA loans usually have 10 year terms and 5-8% interest rates, our loan payments will be around $3,600 per month or $43,200 per year.

At the end of the year, if the business made $100,000 again, after $43,200 in loan payments we will still have made $56,800.

That’s a 162% cash on cash return! And you still maintain your $35,000 equity in the company (plus the equity you gained from loan payments).

You may even be able to use this method with less than $20,000.

How to Double $1,000,000 or more

I’ve never had $1,000,000 to invest, so I’m not sure how I would go about doubling it in one year. When I’ve listened to interviews of the greatest stock investors of our time, they often say that the more money you have to invest, the more limited your options become.

If you have a few million to invest, you won’t double your money by cutting down on some recurring expenses, you’re also not going to be able to put 5% down on a real estate investment at this point.

Businesses are still an option, but the Small Business Administration loan guarantees max out at a certain point ($5.5 million when I wrote this article).

So at this level you’re very unlikely to get lending for less than 20% down. The good news is that you can still get great ROI on a business investment without a super low down payment.

Business investment with 25% down

Turns out buying a business can be an insanely good investment even higher down payments. Let’s look at an example with a 25% down payment.

Let’s say we’re buying a business that makes $2,500,000 per year and we’re buying it for $10,000,000.

Note: I’ve found that higher profit businesses typically sell for 3-6 times their yearly revenue.

In this case, we would be putting $2,500,000 down to buy 25% of the business and taking a $7,500,000 loan to pay for the rest. I’ll again assume a 10 year loan at 6.5% interest, which would result in monthly loan payments of $85,000.

So our loan would cost about $1,000,000 per year. With our yearly income of $2,500,000 our take home profit would be $1,500,000 after making our loan payments.

We didn’t quite make back the entire $2.5 million that we initially invested, but that’s still a 60% cash on cash return, meaning you’ll double your money in less than two years.

Conclusion

I believe that almost anyone can double their money in a year if they learn the power of leveraging their money, and expand their investing options beyond only the stock market.

If you don’t have much to invest (less than $5,000), then you probably won’t be investing in traditional ways. You’ll need to look for creative ways to reduce your spending and increase your cash flow to double that money.

Once you have over $5,000, investing in real estate starts to become possible. The majority of your ROI in real estate is powered by high leverage (aka loans with low down payments) and property appreciation.

And the more money you have, the more you’ll want to consider buying a business for huge ROI. Lucrative real estate returns get more difficult as you have more money because lenders are less willing to give you a low down payment on your loan terms.

I’m sure there are other repeatable ways to double your money in a year, but these are the ones I’ve either done or am currently attempting to do.

Happy investing.

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