Figuring return on investment
Usually when I buy things, I buy them because they are things that I would buy anyway, but sometimes it’s nice to consider the possible return on your investment before making a purchase. (Especially if you’re trying to decide which type of household project to do first.)
For example, we recently received about an 18.5% return on our investment of two new windows. This means that the windows could be said to have “paid for themselves” in about 5 years. Replacing two more of our windows will probably result in an even faster payback period, because 1) they have actual gaps in them and 2) we won’t be using the more expensive rain glass that we got for our first two windows, so we’ll spend less money on them in the first place.
If you’re curious about what types of items might provide the greatest ROI, you can use a chart like this master ROI table to get a good idea.
Related Websites- Dollar cost averaging and assumptions MyMoneyBlog recently had a post on dollar cost averaging. In this post there is a reference to a paper by Knight and Mandell, the conclusion...
- Link roundup: Whiplash edition The market's up. The market's down. It's up. It's down. It's up ... no down ... I mean up! Apply some heat to your neck...
- Good Debt, Bad Debt and Flawed Investment Return Data I can't tell you how often I hear or read someone argue that they have "good debt." This "good debt" argument is made to rationalize having...
