Sunday, May 18, 2008

Let My Money Do Something

Since the interest rate is low right now, I decided that I might as well get a return off some of my money by purchasing consumer durables. As I noted last Wednesday night, I just got a new digital camera. I plan on getting utility out of it for a couple years.

I know theory tells us that investment (in the business sense, not the stock market sense) will pick up when interest rates are lowered. This is why lowering the interest rate is supposed to stimulate the economy. However, I'd like to share some ideas that might make you even more willing to take some cash out of your savings account.

If you buy something that can make you a return, like CFL bulbs or high efficiency appliances, then you are investing in consumer durables. The CFLs will save more than their cost over their lifetime. Each month, you get a small return from them which is the difference between what your electric bill would have been with incandescents and your new bill with CFLs. One REALLY nice feature about this dividend on your investment is that it's tax free. Same goes with appliances. If your new fridge saves you $10/month, then it's earning you $120/year of tax-free income. Also, if you're thinking about replacing the washer/dryer with the high efficiency models, consider the yearly return in energy (and water and time) savings and add in the trade-in value of your current washer/dryer.

Those stimulus package checks should be coming pretty soon and they might be just the thing you need to push you over the edge to buy some consumer durables that will go to work for you.
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