Working from home to save money

home office
your new office?

How much money could you save by working from home, or to put it differently, how much of a pay cut would you be willing to take to work from home?  Answer: $106,000 over 10 years, over 2 times the average American salary.  Unfortunately, quality work-from-home opportunities are not always easy to come by.

If you are lucky enough to work for a company with an established telecommuting policy and you don’t already work from home, you may want to reconsider.  Working from home isn’t for everyone, but for the early retirement / financial independence enthusiast, it can be a very powerful lever to increase your savings.  There are also other fringe benefits such as more comfortable work attire, possible tax deductions, lower clothing expenses, better time utilization, geographical arbitrage, etc.

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Why air drying your laundry isn’t worth the trouble

won’t be needing these guys for a while

I wanted to start with this example for two reasons.  One, because nobody is really getting excited about air drying their laundry.  And two, because this is a pretty straightforward example that will help familiarize you with my approach.  Okay, enough talk, here are the stats:

Scenario: Use an electric dryer versus manually air drying your clothes

  • 10 Year NPV: $480
  • 10 Year ROI: 41%
  • 10 Year Payback: 0.5 years

Calculations Summary:

roi - air dry
roi – air dry

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Water efficiency upgrades for the home

water blue
water upgrades… a drop in the financial bucket or a tidal wave of savings?


Upgrading toilets, faucets, and shower heads in a 2-person, 2-bath home saves about $450 over 10 years.  The upgrades don’t really start to pay for themselves until years 4 through 6 though.


I’m a renter by choice, but this article is for the home-owners (and landlords?) out there.  It is about replacing and/or upgrading water faucets, shower heads, and toilets with newer, more efficient models, and whether or not that saves the average household a lot of money.

There are some extremely efficient water fixtures on the market today, but the standard I’ll be using is EPA’s WaterSense, which is pretty similar to the Energy Star rating for appliances, except it is for water.  WaterSense fixtures might not be the most efficient ones on the market, but they are still a pretty big improvement over models built to older standards.

Before I jump into the numbers, it is worth noting that some states and/or cities provide incentives or rebates for WaterSense upgrades.  You can check the list here.  I’m lucky enough to live in Portland where we actually had someone from the city going door-to-door installing CFL light bulbs, high-efficiency faucet aerators, and new shower heads… for free!  Cha-ching!  Now if they would only start subsidizing my renewable energy bill…

splashing water
splashing water

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A visualized future

frozen berries
frozen berries


I remember hearing a motivational speaker talk at a college leadership conference back in the day.  He was talking about the power of visualization and had us do a silly exercise where we keep our feet in place and twist as far around as possible from our torso, marking the farthest spot with our eyes.  Then he really tried to pump us up, telling us about how flexible the human spine is, etc.  After that, we tried again, and almost everyone twisted much further than before… wow!.. Mind blown

Excusing the sometimes sheistiness of motivational speakers, I do think the guy was on to something.  Visualizing a specific outcome often brings that outcome more within reach.  And with regards to retirement and financial independence, visualizing what life might look like when you no longer need to work and/or worry about money seems like a fun and useful exercise as well.

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How to use a ROI

aurora borealis


ROI is a comparative financial performance measure that stands for return on investment.  The technical formula for ROI is:

(gain from investment – cost of investment) / (cost of investment)

In other words the formula is simply net profit divided by total cost.

To put it in concrete terms, let’s say that someone invests $100 in books about how to code.  After they read the books, they start a small side business doing contract programming work from home.  At the end of the first year they’ve made $5,100 dollars with the coding business.  So to calculate the first year ROI, it would simply be profit divided by total cost, or $5,000 divided by $100, which equals 50.  Since ROI’s are usually expressed in percentage terms, that would be an ROI of 5,000%.

If this person continued to make $5,000 a year from their new coding business, the 10-year ROI would be about 10 times larger, so it doesn’t really make sense to compare ROI’s across different time periods.  That is why I use the same 10-year timeframe for all my analyses.

There are some investments, however, that deserve to be evaluated on a longer time frame, such as the value of a college education for example.  Another one that comes to mind is the impact of high fees on mutual funds and ETF’s.  For most scenarios, however, 10 years seems to work pretty well.

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The true cost of smoking



Everyone knows that cigarettes are bad.  I’m not here to sound that alarm again.  This post is about the true costs of smoking, including not only the hard cash spent on a pack of cigarettes, but also the subsequent health-related costs and shortened life expectancy.

Based on data from the American Cancer Society, I estimate that smoking half a pack of cigarettes per day costs $78,500 every 10 years.  Imagine what that does to the savings of a lifetime smoker!

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The true cost of childcare

baby with glasses
a future budgets are sexy reader, no doubt


Everyone knows that big kids are expensive, but little kids are expensive too.  What if it made more sense for the typical American parent to quit their job for 4 years instead of sending their kid to daycare / childcare / pre-k during that time?  Wouldn’t it be nice?

Yes, it would, but in fact, it is actually a huge opportunity cost for most people to quit their job to take care of kids.  The situation isn’t without some advantages, though, like having more control over the very important early development years of your kid’s life.

It’s a complicated decision, but there are few data points here that hopefully make it a little less murky.

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Some thoughts on timing the stock market

hudson bay


Earlier in the year I wrote about how to get a good deal on stocks.  The post was called “happy hour at the stock market.”  A quick summary of the article is as follows:

  1. Stocks can be expensive and stocks can be cheap.
  2. It is in your best interest to buy when stocks are cheap (more bang for your buck).
  3. On top of that, it is in your best interest to invest your money immediately (lump sum investing) versus spreading your investments out over a long time (dollar cost averaging) because the stock market almost always goes up.
  4. In really expensive markets, like in the summer of 2014, it could make sense to dollar-cost average or implement some timing strategies to limit downside risk.

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The Best Books of 2017

Need a good book?  Here’s my summary of the best books of 2017 arranged by the number of accolades they received.  There is a definite fiction bias.

Use this Amazon link if you’re feeling generous, or use this piracy link if you’re a dataist.

Raising successful children: advice from the “experts”

The 6 keys to a healthy life



This isn’t exactly my area of expertise, but then again, I’ve never claimed to be an expert in personal finance either.  I’m just very interested, learning as I go, and sharing with anyone that might want to listen.  With that in mind, I recently became curious if there was any simple, definitive list of the most important aspects of healthy living.  It was hard to find, so I had to sort of compile what I found around the internet.  Here is what I came up with…

The 6 Keys to a Health Life

  • Exercise regularly
  • Don’t smoke
  • Don’t drink too much
  • Maintain a strong social network
  • Eat right
  • Get plenty of sleep

I don’t know about you, but I was really hoping for a shortcut.  Unfortunately, these all sound remarkably similar to what a well-intentioned relative might have told me as I was on my way off to college.  But that’s the nature of conventional wisdom; it’s usually conventional for a reason.

One big problem with trying to find the single, most-important answer to the question of what makes for a healthy life is that many factors of health are interdependent.  For example, hypertension, or high blood pressure, is one of the top causes of death in the developed world, and all 6 factors listed above will have an impact on hypertension to some extent.

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