There’s one thing traditional business families — especially Baniya businessmen — understand about finance better than most entrepreneurs today.
It’s not complex accounting.
It’s not advanced valuation models.
It’s something far simpler — and far more powerful.
👉 How quickly can your money double?
That’s the only equation that really matters in business.
🧮 The Simple Logic
Your money doubles in about:
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9 years if it’s sitting in a Fixed Deposit
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6 years if it’s in the stock market index (NIFTY / SENSEX)
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Less than 4 years if your business is truly worth doing
Let’s decode this with the Rule of 72 — a timeless concept in finance.
📘 The Rule of 72 Explained
It’s simple:
72 ÷ rate of return = number of years your money takes to double
So,
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At 8% returns (like an FD) → 72 ÷ 8 = 9 years
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At 12% returns (like stock market averages) → 72 ÷ 12 = 6 years
Now here’s the kicker —
When you invest in your own business, you’re not just investing money. You’re investing time, energy, risk, and effort.
So, if the stock market doubles your money in 6 years without your effort,
your business should double it in half that time — 3 to 4 years.
That means your business should generate around 18–24% annual post-tax returns.
💡 The Takeaway
If you invest ₹1 crore in your business, you should aim to:
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Recover that ₹1 crore within 4 years, after tax, through profits.
Because if your business can’t beat the return from a stock index — where you do nothing but wait — it’s not worth your time or capital.
That’s what seasoned Baniya businessmen understand instinctively:
Money should work faster when you work harder.
🎯 Final Thought
Finance doesn’t have to be complicated.
It just needs perspective.
At CFO Emeritus, we help founders evaluate business performance with this same clarity — whether your capital is compounding fast enough to justify the effort.
📩 Want to analyze whether your business is compounding at the right rate?
Reach us at office@cfoemeritus.com
