I am constantly amazed at the opportunities for investments around the house, which have outstanding returns and are seldom recognized.
Last week, I was visiting my parents and my brother. The topic of insulation came up and we realized that both homes have minimum insulation in several areas. I volunteered to do an analysis of the cost/savings potential in adding some insulation.
For example, both homes are built in pier and beam style and have no insulation under the floor. Granted, ambient temperatures are moderated by the shade and air contact with the ground. But even after adjusting for this, the investment potential for adding insulation is outstanding.
One exposed area is approximately 1500 sq ft. I estimate this can be insulated with 6" of fiberglass at a cost of about $900. Meanwhile, I calculated the energy savings at over $500 per year. This is an annualized return of over 50% per year, essentially risk free. Compare that to the 5% they are getting on CDs these days! In fact, I challenge anyone to come up with an investment with this return and so little risk.
But wait, I can hear the protests...I don't have that kind of money laying around!! In that case the deal is even better. If you finance the $900 for 10 years at 10%, your monthly payment would be about $12/month. Since your average savings on utilities is about $43/month, you would end up with $31 in your pocket every month with no outlay. In less than 4 years you can pay off the note, have $900 in your account and still have the insulation, where it will save you $43/month for as long as you live in the house! You just can't beat that for an investment.