I’ll never tell you that I can consistently outperform the market by picking stocks, and anyone who says otherwise is a liar. However, I will tell you how you can crush market rate returns by investing in improvements to your life and your house that will create savings far beyond investing in ETFs. In this post, I will show you how I was able to generate an annualized return on investment of 20.5% for 22 years with extremely low-risk. Why would you even consider putting those extra savings into crummy, low-risk Savings Bonds that your bank is trying to sell you right now for 1%? Don’t do it…
This newsletter is not solely focused on making money. I want to provide people with economically compelling tools to reduce their environmental footprint and greenhouse gas emissions. Many people are motivated to fight climate change but don’t necessarily know how what they can do. Other people need some extra motivation to make the necessary changes. I’m here to tell you that there are ways to make lots of money, while simultaneously protecting the environment.
As you can see in the chart below, LED lightbulb technology has come leaps and bounds in the last decade, dropping more than 90% in price. LED bulbs also use less than 10% of the electricity that incandescent bulbs use and last up to 50 times longer. For example, an LED-equivalent to a standard 60W incandescent bulb uses only 5W of electricity. When they first came out, the light was not so pleasant but now you can choose the exact temperature of lighting that you want with LEDs and fit any type of light fixture beautifully.
After doing some calculations, I became obsessed with LEDs and replaced every single bulb in the house. I invested $340.80 to replace 64 bulbs of different shapes and sizes, creating approximate annual electricity savings of $450.91. Setting up automatic contributions to my Wealthsimple account with these savings, and expecting a conservative 7% average rate of return over the 22-year lifetime of the bulbs, will leave me with $20,587.23. This doesn’t even take into account the time and money that is saved by not having to replace incandescent light bulbs every couple of years. See the chart below for a comparison of reinvesting the electricity saving after first buying bulbs versus just investing the cost of the bulbs right away.
I’m pretty excited about the investment income if you can’t tell. But I’m even more excited to say that this change will equate to 3 metric tons of CO2 not entering the atmosphere every year. Which is equivalent to keeping one vehicle off the road for more than 6 months or put another way, the amount of CO2 that 3.5 acres of forest (138 trees) can absorb in a year.
The investment opportunity is limited of course. I do not have infinite light bulbs to invest in. However, this is just one example of how making small changes in your life today can amount to riches in the future.
Now you know it’s easy to get wealthy and do your part to fight climate change at the same time. Subscribe to the e-mail newsletter to receive many more tips on how to become wealthy and protect the planet at the same time.
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