Making simple investments in your home today will pay thousands of dollars in energy dividends for years to come.
It's important to know that a few of you will not be able to invest as effectively as I estimate. Some people will save more than the average, others less. Others might already have incandescent lights or a new washing machine. In short, investing at home will be different for everyone. But no matter what your situation, your home improvements will always be profitable, low risk, tax free, and inflation proof.
Installing Compact Fluorescent Light Bulbs (CFLs) is probably the easiest way to begin investing in your home. While early models gave off a harsh light that turned off many people, modern CFLs are almost impossible to distinguish from traditional incandescent light bulbs.
Replacing just one commonly used bulb (one that burns for 8 or more hours a day) will earn the average American almost $20 a year. The ability to scale your improvements from one to forty or more light bulbs makes installing CFL bulbs a no-brainer for households of all sizes. The average family of four will earn back its investment in less than a year!
Investing in a new, powerful, and efficient showerhead will reduce the amount of hot water (aka $$$) that you send down the drain while maintaining the same water pressure you are used to. If you're going to make one investment in your home, this is the best. Many people have showerheads with flow ratings of 2.5 gallons a minute (g/m) or more. Installing a new showerhead with a flow rating of 1.6g/m (or less) is easy - all you need to do is unscrew your current showerhead with a wrench or vice grip and screw your new one on. No plumbing required!
This is the little investment that could. Installing a 1.5 g/m aerator in the kitchen and a 1 g/m aerator in the bathroom is a $20 investment that will pay for itself in eight months. It might not sound like much, but if you re-invest these earnings in a safe, high yield utility stock or bonds that earn just 4% a year, this simple investment will increase the average family's savings account by $1,800 over 30 years.
This is an especially great investment if you live in a city with high water/sewage rates (like Atlanta, Seattle, San Francisco, or New York City), or in the suburbs, where water costs can exceed city costs 25%-100%. In Atlanta, for example, aerators will earn an average family of four $100 a year in water saving dividends.
About 65% of washing machines in the U.S. are top-loading, which are horribly outdated and inefficient. Modern washing machines use much less water, which means switching will save lots of money in the long run, especially if you use warm or hot water to wash your clothes. All of my estimates assume the use of warm water. If you use hot water, average earnings will rise to $174/$162 for electric or gas heated water, respectfully.
Most toilets are designed to flush your money down the sewer. Toilets installed before 1995 use 3.4 gallons or more per flush, and if you have one of these toilets, replacing it is a good investment. New dual flush toilets work as well or better and will earn you thousands of dollars in energy dividends over their lifetime. If you have a newer toilet without dual flush, a dual flush toilet will earn money, but at a much, much slower rate.
Alternately, you could also buy a dual flush converter. Though I have no personal experience with these devices, they are designed to convert your existing toilet into a dual flush toilet. They have the added advantage of being much, much less expensive than replacing your toilet. In theory, this is a good investment if you have a newer toilet. However, I cannot vouch for how much water they save or how well they work. Many of the reviewers on Amazon, however, are very enthusiastic.
These five core investments are the easiest way to begin earning money by investing at home. If you'd like to earn more money, there are plenty of other ways to effectively invest at home, though these investments are not for everyone.
It's also important to know how to re-invest your energy dividends. If you've already exhausted the low-hanging fruit of home investment, here are some traditional investment ideas.