The Rule of 72

QCan you explain what the “Rule of 72” is? — G.L., Houston

AIt’s a way to quickly estimate how long it will take a sum to double: Divide 72 by your growth rate.

Let’s say you’ve invested in something that’s growing at 4% annually. Dividing 72 by 4 gets you 18 — meaning that it will take about 18 years to double your money. Earning 7% annually? Your money should double in about 10.3 years.

The rule works in reverse, too: If you’re aiming to double your cash in eight years, divide 72 by 8, and you’ll see that you’ll need a growth rate of about 9%.

It can even help account for inflation: If inflation is averaging 3% annually (as it has been, historically), divide 72 by 3, and you’ll see that prices are likely to double in about 24 years.

QHow can I invest in wind-power stocks? — H.K., Boise, Idaho

AYou might look into manufacturers of turbines and wind-related products; General Electric and Vestas Wind Systems are two of the biggest, with Vestas being a pure play in wind and General Electric focusing on wind along with other kinds of energy. Energy companies such as NextEra Energy, Dominion Energy and Xcel Energy are worth consideration, too; in 2018, NextEra Energy generated more electricity from the wind and sun than any other company in the world.

There are also exchange-traded funds (ETFs) focused on wind energy, with assets spread across many wind-related companies. The First Trust Global Wind Energy ETF (FAN) is one example.

Be sure that you’re not invested only in wind stocks or only in energy companies. Diversify your holdings across a range of industries.