Read the updated post on Saving Money with Electricity.
Often, when investing, we are looking at the dividend yield in stocks. The higher the yield, the more we get paid. However, applying this principle to other activities in our lives can be helpful. We invest in electricity light bulbs to save money.
Invest in Electricity Light Bulbs
We had a bright idea. What if we applied this to buying LED lightbulbs for our house? A new LED light bulb cost about $10. If we replace a 50-watt light bulb with a 10-watt light bulb and use it for 3 hours a day, we will save $5.70 a year at $0.13 per kWh. That is a yield of 57%. What stock can you buy with a yield of 57%?
Working with bigger numbers, it is estimated that 10% of electricity is used on lighting in the house. If you spend $2,000 a year in electricity and you cut your lighting bill down by 60%, this comes out to saving $120 a year in electricity.
In our house, we have replaced 40 light bulbs with LEDs. And the great thing was that we did not have to buy all 40 at once. When we went to the different big box retailers, we would sometimes buy 1. When we went to Lowes or Home Depot, we will buy another one. In less than 2 years, we upgraded just about all of our lights. Even though they did not need replaced, the electricity savings were worth too much.
And we get some bonus benefits. Some of them have been in use for over a year now and none of them have burned out. LEDs are advertised to last much longer than incandescence and fluorescent light bulbs. Once the last one is replaced, we should not have to buy anymore for a long time. And they produce less heat, taking some of the load off of our AC unit, saving us more electricity.
Being that we replaced 40 lights, that is about $400. We could have bought a utility stock with a 4% yield making us $16 a year in dividends. We bought $400 in LED lights estimated to saving us $120 a year in electricity bill. That works out to a yield of 30%.
While the goal of this site is to build a passive income with stocks, that does not mean we cannot apply this thought process to our parts of our finances. And with the $120 a year in additional savings, we can apply that to buying more stocks in the future. And since we want our passive income to cover our expenses, we now need less dividend income to cover our expenses.
Do you invest in electricity light bulbs? Or do you prefer to keep that money to invest in dividend utility stocks? Please share in the comment section below.