Read this article and got thinking…
I don’t know about you all, but having a home (or at least a retreat home) that is 100% energy/resource independent is a big “financial planning” and “life planning” goal of mine. I think it not only can be a big money saver, but also reduces our impact on nature. I have to admit to not being a militant environmentalist as I see some things a bit more practically in my opinion. But the benefits of the following amenities to a home:
- -Geothermal heating
- -Solar electricity/heating
- -Well water
- -Wood stove
Are immense. These ideas reduce or affect your life in the following ways:
- -prevent burning oil & gas
- -prevent gas explosions in your home
- -prevent the need to dig up the whole town for pipes ( can’t avoid in a city)
- – helps us manage use of resources in our area like water and wood (many well owners tend to capture rainwater too)
- -control and prune surrounding wooded areas (burn older dying trees for firewood)
- -cuts costs
And as far as cutting costs: not only currently as I have mentioned in past articles on saving money through PERSONAL energy independence and similar ideas (see interview I did HERE) but it can help with future costs. I don’t care what people say about deflation, we have inflation. And if things work out like I think, it’s going to cost you big. Let’s analyze what you can do about that.
Little Background Time Here
The classic definition of inflation refers to inflation of the ‘money supply.’ In the old days that meant how many dollar bills were actually floating around and available. Later we expanded that and now, with the ability to conjure money with the stroke of a computer key, money supply dynamics have gone wild.
Now, most people, including the economists/financial types we see in the news the most (e.g. Fed Chairman Bernanke) refer to inflation in terms of the price of things – i.e. “price inflation.” (see Wikipedia definition HERE for what I mean) Therefore, our focus now is on prices. And if the correct prices were used, as in the cost of everyday consumables and other things we regularly spend on, I might not mind it. But Bernanke et al focus on CPI, a government-massaged data point, and he tends to focus on ASSET prices, like housing and stocks.
Don’t let this distraction fool you. House prices may be falling (from a ridiculous peak nonetheless) but what you spend on everyday is not falling. Over the last 10 years, your cost of the following items:
- heating oil, gasoline
- property taxes
- insurance premiums (esp. health)
- items using significant amounts of commodities and labor like autos
- condo fees
has gone up dramatically. My current favorite example to use is the Individual Uno’s Cheese Pizza. I remember ordering this for $4.50 in 2001, 2002. Current price? $10.99 (see here for online menu). That is roughly a 144% increase over the past 8-9 years. How many people have
earned 144% in their stock portfolio over the last 8-9 years? How many people have received pay raises of 144% over the past 8-9 years?
Energy independence can go a long way to help make sure, especially if you are close to or at real retirement age (real = income likely fixed), that you don’t get hit with such huge cost increases to your standard of living. It’s important that you take steps to plan your expenses and income in retirement well before you get there if possible IMO. What kind of numbers am I talking about? See my analysis of solar electricity that a client was considering here:
How to Measure Return on Green Investment (7/8/2009)
I also exhort people to prepare for times when the US’ debt problems come home to roost and cost you big money here:
The Debt Crisis Will Strike Suddenly and How You Can Protect Yourself (2/8/2010)
There are many reasons to consider PERSONAL ENERGY INDEPENDENCE (not the kind that benefits gov’t I mean take action to protect YOU, don’t wait for your Congressman to do this for you. Be an American and take action! That’s what Americans are known for, good or bad).
Here’s an interview I did on this topic (from my company page Chris in the Media:
What You Won’t Have to Spend in Retirement Makes for a Wise Investment Now (11/18/2010)
Hope this helps you think a little differently!
About Chris’s company Walnut Hill Advisors, LLC
Walnut Hill Advisors, LLC is my financial planning firm, located in Medford, MA just outside Boston. We help people with retirement planning and comprehensive financial planning and are not stuck in doing things robotically. We pride ourselves in thinking:). To learn more about the process, visit my company site page on How to Get Started or start by reading some of my financial articles on my company site. Thanks!
This article is meant to be educational and informative, but is not meant to be specific advice. Consult your own advisor before making any financial decisions. See my Chris Grande disclosure page HERE and go HERE for my Walnut Hill Advisors, LLC disclaimer page.