Pick a TBTF bank:
#1 – Put $10K into a CD in that bank.
#2 – Buy $10K of Stock.
After a year, which would yield more?
I know the risks are different.
It’s a question of choice…
Invest it or Save it.
If you are complaining the banks are making too much money, then may be you should be investing in the stock and reaping some of your gov’t money back.
It might help to pay those additional taxes.
A premium window contractor wanted me to sell me replacement windows that would have cost $30k to save me money on my utility bills. My utility bills were less than $200 per month (we don’t need to use our heaters or AC much). Even if my utility bills went to $0, it still would be a 12.5 year payback. If I save 50% on my bill, my payback would be 25 years. Of course as utility costs would rise, payback would be faster. The question would be how much.
On most utility bills, half of the cost is distribution costs. Regardless of how much energy we use, these cost must offset the fixed costs of the utility. As our energy use is reduced collectively, percentage of these fixed costs must rise on the bill. These cost will always rise regardless of the energy used. This will offset any perceived savings. The ones who will benefit the most will be the ones who incur the savings first, kind of like a pyramid scheme.
On utility cost alone, I would probably never live to see the $30k windows payback and I’m 49yo. I could not justify the cost of $30k in windows.
Result: Purchased same efficiency window with low-cost contractor for $10k. I needed new windows for other reasons than energy usage (comfort, noise, leakage, dust, etc.). Invested the other $20k. And I will still not see any payback on the $10k.
The morale of the story: it was more ‘cost effective’ to invest $30K in the utility companies than to change out my windows. It is very unlikely they will go BK. They get equitable cost adjustments every year. The yearly ROI would pay my utilities – win-win. Investment rule #1: Invest in what you use – pay yourself back.
