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September 2010
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Investing – did you ever look at it this way?

I copied this from an investment letter I read. I had not really looked at it this way but following his numbers it is a real payout. I fully agree that the Solar stock (most all of them) are “wishful thinking” at present. I would really like to do solar and put in a replacement for some of the power we now have to buy, but economically it just does not pay out in my lifetime.

from the writer he states “I’ve found a solar power investment that generates a tax-free, risk-free 13% return on my money.

It’s not a solar power stock. Solar power stocks are mostly garbage. And it’s not a home-electricity system that turns the sun’s rays into power. Those systems are not cost-competitive yet.

Instead, I’m investing in a solar power hot-water heater. My system will use the sun’s rays to produce hot water, which will accumulate in a storage tank. My family will use this water for taking showers, washing dishes, and so on. The solar system will replace our standard electric hot-water heater in the garage. For cloudy days, the solar system has a back-up electric element to make sure we always have hot water.

I’ve run all the numbers. First, we get a 30% federal tax credit. So our system will cost $3,600 instead of $5,000. Second, it’ll save us $40 a month on our power bill. That’s like an annual 13% tax-free return on investment. Plus, the more power prices rise in the future, the higher our return becomes. It’ll also add value to our house, as energy efficiency is a big selling point with homebuyers.

In short, forget solar power stocks and don’t touch solar home-electricity systems. But for a risk-free 13% return, consider adding a solar-power hot-water heater to your house. The sun provides your hot water and you make a great return on your investment.”

13% is better than you will get in nearly all of the highest rated investment advisors and this is paid out over the life of the unit? Again, something to think about as a “not normal” investment strategy.

WD0AJG

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