The 12.5× rule: fund free vacations for life
Imagine your money paying for your vacations every year for life. That’s the power of compounding—a core personal finance idea. Using the 12.5x rule, you can make vacations free forever. Simple money skills, big result.
The math: if you invest and it grows at 8% a year, you can take out that 8% and the principal stays. To get $10,000 a year, you need 12.5× that amount invested.
Make your vacations free for life!
Enter how much you want to spend on vacations and fun every year. See how much to invest so your money pays for them forever.
Why this matters
Compounding is like a snowball: once you have enough invested, it rolls on its own. You stop working for your fun money—your money works for you. That’s the money skills secret to building real wealth.
Related research
The ideas in this guide are backed by academic and policy research. We organize fundamental studies by Margin Score pillar on our Research page.
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