Beating Broke

Personal Finance from the Broke Perspective

Your Primary Home is NOT an Investment

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Home or Investment?Your primary home is not an investment in the normal sense of the word.  Dictionary.com defines Investment thusly*: “the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.”  Some of you will argue that you buy your house because it will appreciate in value.  But, to fit the definition, you must have bought it specifically for that purpose.  And in the case of a primary residence, that isn’t true.

When you bought (or buy) your primary residence, you’re looking for a home.  You’re looking for a place to call your own where the money that you spend on it goes towards your ownership of the home.  Sure, it may show some returns by way of appreciation of value, but those are locked into the house until you sell.  And, truthfully, you probably don’t care about that unless you sell, so if you plan on living in the house (the definition of primary residence) it makes little difference what the house is worth as long as it provides a home for your family.

So, don’t be fooled into looking for a good “investment” when you buy a house.  Look for an affordable home that will provide for your shelter needs.  When (if) you sell the house, it gets converted into an investment and you will have hopefully made some money, but when you’re looking for a home, pick the one that will fit your needs. Not the one that shows the most potential for return.  That’s what second homes and rental properties are for.

*I know that thusly isn’t really a word.  I blame it all on Alton Brown.

Photo Credit: svilen001 @ sxc.hu

Is Recycling Bullshit?

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Show of hands.  How many of you actively participate in recycling endeavors in your community?  You schlep around your empty cans, jugs, and bottles.  You pile them up with your used papers, then sort them all into bins so some poor schmoe down at the recycling center doesn’t have to.  All so your city can save a few dimes on an already expensive endeavor. Ok, now show of hands, who thinks recycling is bullshit?

Let’s think about this honestly for a minute.  Because, I think we’ve got our terms confused.  What, exactly, is recycling?  It’s the taking of something that’s already been used, and putting it back through the manufacturing cycle so that the material can be used again.  That extra cycle is where the term recycling comes from!  But, what is the cost of that extra cycle.  Let’s break it down a bit.  We’ll ignore the first cycle, since it’s going to get used for the first cycle regardless.

Let’s consider a plastic bottle.  It’s been created, and used.  It’s empty, so has no further use in it’s first cycle.  You collect it with similar bottles, then submit it to the local recycling center.  We’ll discount the energy that you use in collecting the bottle, as it really isn’t that much more work than you would use in throwing the bottle away.  But, what about the energy that will be used in picking up or dropping off the bottle.  You’ve got to either have someone pick up the bottle, or you have to drop it off at the recycling center.  Once the bottle has been taken to the recycling center, it then has to be shipped to a factory where it can be broken down in a way that makes it recyclable.  More energy wasted in transportation.  Once it’s there, at the factory, it then has to be broken down.  Depending on the process, that could involve melting the plastic under heat.  It could mean squishing, cutting, and making the plastic into threads.  Even more energy wasted.  Once it’s been broken down, the resulting product must be taken to yet another factory that can then turn it into the “recycled” product.

By the time it’s recycled, it’s been through a manufacturing process three times.  Does the extra cost in energy, pollutants, and work make it worth our while?  I’m not sure that it does.  Want to take a deeper look at some of this?  Take a look at this video.  Now, arguably, the show is called “Bullshit”, and anyone who uses that as the name of their show (or as a title for an article) is out to be a bit sensationalist.  And, certainly, I don’t know that Penn and Teller count as experts.  But, I do think they make some interesting points.  There’s three parts to it, so it’s a bit long, but worth watching, I think. When you’re done, we’ll continue on below. P.S. as you can imagine, a show whose title is “Bullshit” has some NSFW language in it.



I admit, I like sensationalism. And, I’ll make another admission. I’m not entirely against recycling. But, I tend to think that the first two parts of the motto “Reduce, Reuse, Recycle” are far more useful and important than the recycling. By reducing the amount of energy and products that we use, less needs to be made. By reusing the things that we can, we reduce the amount of products that will need to be recycled or thrown into a landfill.  Instead of expecting someone else to ease my conscious, and take away my trash to be converted into something usable, I’d rather reduce the amount of trash I make.  Less paper plates.  Less non-reusable water bottles.  Less stuff.

The one thing that I collect to send off to recycling is soda cans.  Mostly, because I can drop them off at the local Humane Society where they take them to a scrap metal yard and sell them for cash.  It’s an extra way to give to one of my favorite charities.  Here’s some more sensationalism for you.  The Humane Society is, essentially, a pet recycling center.  People take their unwanted and used pets there, so that they can be washed, fed, given their shots, and sent back out to a new family.

I’ve gone on about recycling long enough.  Now, it’s your turn.  Is recycling bullshit? Scroll down a few inches on the screen and leave a comment.  Do you agree that recycling might be bullshit?  Do you recycle religiously?  What steps do you take to reduce, reuse, and recycle?  Heck, you can let me have it in the comments too, if you like.  One small caveat in doing so, is that any excessive NSFW language will likely get edited out.

 

Save Money by Turning Off Appliances

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Saving money isn’t the only thing out there if you want to become wealthy.  All it does is reduce the amount of money you spend.  You’ve still go to find ways to make more money through a better paying job, passive income, or a second job.  But, it’s still an important part of a well-rounded wealth plan.  One of the more popular, green, methods of saving a few dollars is to turn off your appliances.  Turning them off isn’t the end of it though.  Many of them still pull a small amount of energy from the electrical system even when they are, technically, off.  While it isn’t a whole bunch, it still can amount to enough to keep you from realizing your full savings.  In the UK, they have electrical sockets that have switches built into them that turns the socket completely off, and cuts it’s supply of electricity.  Unfortunately, here in the US, we don’t have such a thing.  But, we can buy power strips and adapters that have timers and switches to cut the supply to the sockets.

Power Strips

Power strips come in many different shapes and sizes, and almost all of them have a switch of some sort on them to cut the power.  Buying one isn’t a huge problem.  Your local Walmart likely has several to choose from.  Consider the things you’ll be plugging into the strip, however, when shopping for one.  If you’ll be plugging in sensitive electrical equipment, like computers, DVD players, laptops, and printers, you’ll want to have one with a surge suppressor, at the least.  You might even consider getting one with a battery backup system so that the equipment stays on when there’s a power outage.  If you want to get really fancy, take a look at this strip from Belkin.  It’s the Conserve Smart power strip.  It’s got a socket that can detect when the item plugged into it is turned on or not and shut off several of it’s other sockets based on that info.

Power Adapters

Adapters also come in several shapes and sizes.  If you want to get a close look at what you are using in electricity, you can use an adapter that will monitor usage and has a readout of the total usage. Something like this Kill-A-Watt energy usage monitor would do the trick.  A more simple, and elegant, solution is the Belkin Conserve Energy Switch.  It’s a simple adapter that goes between the socket in the wall and the device you’re plugging in.  It’s got a toggle switch built right in allowing you to simply flip the switch and cut the power to the device.  It should work great for devices like coffee makers, shredders, and anything else that doesn’t require multiple sockets or anything fancy.

Pull the Plug

Yes, there is an even simpler solution.  Simply pull the plug from the outlet.  No fancy adapters or power strips needed.

With any of these solutions, there’s a small amount of learning curve in play.  You’ve got to learn to remember to flip the switch or unplug the stuff when you’re not using it.  You’ve also got to learn to remember to flip the switch back on or plug the stuff back in when you do want to use it.  Not the biggest thing, and as you do it more and more, you’ll get used to it.  One small note, that I don’t think I really need to say, but I will anyways, is that this isn’t meant to be the be-all, end-all of conserving energy methods.  Making sure you’re using the most energy efficient appliances in the first place, for instance, is likely to save you a lot more on your energy costs than unplugging appliances.  Switching out your incandescent light bulbs for more energy efficient alternatives is also more likely to save you more money.  But, if you’re looking to squeeze a few more cents from your watts (terrible electricity pun, I know.), you’ll do everything you can to save some money, including unplugging or cutting the power to your appliances with a switch like those mentioned above.

Share with everyone!  What are your energy conservation tricks?  Do you turn the heat off all winter and wrap yourselves in wool blankets?  Do you turn off the fridge in the winter and simply store your goods outdoors in the snow?  Tell us!