A Dollar Saved Is a Dollar Earned



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With so much uncertainty in the world, it’s difficult for me to allocate incremental capital to traditional investments right now. I’m currently dumbfounded by the performance of the stock market and I’m waiting to see how this pandemic spills over to the real estate market. While I wait, I continue to build our war chest of cash, while simultaneously looking for creative ways to manufacture financial returns. Since mid-March when the COVID-19 outbreak started dominating our lives, I shifted the majority of my focus to things I could control, like our expenses. I’ve gone through a detailed analysis of all of our outflows looking for opportunities to cut out unnecessary spending.

Like many, if not most, we are naturally going to spend a lot less money this year because of the restrictions placed on our lives in order to combat the virus. This means significantly less eating out, less shopping, and little to no travel (three of our larger spending categories). In our “GYFG Historical Expenses” below, you have to discount the “House Mortgage & HOA” category as it had historically included the additional funds we were paying towards the mortgage, which is why you see a line that deducts these additional principal payments from the total spending to arrive at adjusted spending. As I’ve explained many times in the past, these payments were merely balance sheet transfers and not a true expenses.

Besides our spending naturally declining due to the shelter in place orders we are currently living under, I’ve also made an effort to cut certain expenses, which include:

  • Switching from Verizon to Mint Mobile (saving $2,100 annually)
  • Negotiating with the insurance company that holds our car and home policies (saving $1,200 annually)
  • Canceling or reducing other miscellaneous expenses (saving $4,400 annually)

Although we have been doing plenty of home improvement projects during the lockdown, the projects we have undertaken are relatively cheap compared to past home improvement projects. When you tally it all up, our spending will be down $87,870 or 42% vs. 2019 (our largest spend on record). This also puts us on pace for the lowest spending level since prior to 2015.

A dollar saved is a dollar earned!

The end goal is to get a little wealthier every day through both good markets and bad. With potentially less certainty in our income this year, this is an easy way to still continue progressing towards our financial goals. I typically prefer to do this by focusing on the income side of the equation but sometimes I need to be flexible.

But wait, there’s more!

Back in 2015, we decided to invest in the power of the Sun by installing a solar system on our roofs. This has been an incredible investment that has saved us approximately $2,500 per year on a $10,000 net investment. The keen observer quickly realizes that this is a 25% annual return – not too shabby! Over the years our electricity usage has continued to increase for various reasons and in 2019 our net bill to the electric company was about $950, meaning our solar system was not able to produce enough electricity to cover all of our needs as it did when we first installed it. I expect the minimum annual bill for being connected to the grid to be about $120/year.

Well, the price of solar has decreased, and the federal government is still giving tax credits (now 26% in 2020). So, we are now under contract to double the size of our solar system for a net cost of $8,880. This investment will end up saving us $830 per year (when you net the minimum payment to the electric company). If you perform the simple arithmetic, that translates to a 9.3% return per year.

But wait, there’s more!

The battery technology has come a long way since we first installed solar. Tesla has their battery wall but the cost is high. We got a quote for two battery walls – the recommended amount for our size house – and the price for two is $27,500. Without any rebates or tax credits, that cost doesn’t make financial sense. But this is where it gets really interesting. Like the solar system, there is a 26% federal tax credit. In addition, the state of California is offering up to $26,400 for two power walls (or other equivalent battery storage systems – see Self Generation Incentive Program). The minimum rebate in California is $3,000 per battery wall, but we qualify for the maximum amount. And the California rebate has no impact on the federal tax credit! Suffice it to say, we are also now under contract for two Tesla Power Walls and the company we are working with has just submitted our application for the rebate (we only move forward once they secure our rebate).

Let’s do the math:

Gross Cost $27,500
Federal Tax Credit @ 26% ($7,150)
California Rebate ($26,400)
Net Cost ($6,050)

Assuming everything goes as planned, we will actually get paid $6,050 for installing these Power Walls. When looked at together with the expansion of our solar system, this puts our net cost at $2,830, with a net annual savings of $830 per year (or 29% annual return).

Sometimes you have to get creative and engineer a return!

These are just a few of the activities I’ve been up to during the last two months of “shelter in place” orders. These are the best opportunities I see right now.

– Gen Y Finance Guy

p.s. There is one other opportunity I see that I will share in the near future. You know me, so you know it will not be something most would pursue!!!

Gen Y Finance Guy

Hey, I’m Dom - the man behind the cartoon. You’ll notice that I sign off as "Gen Y Finance Guy" on all my posts, due to the fact that I write this blog anonymously (at least for now). I like to think of myself as the Chief Freedom Officer here of my little corner of the internet. In the real world, I’m a former 30-something C-Suite executive turned entrepreneur turned capital allocator. I am trying to humanize finance by sharing my own journey to Financial Freedom. I believe in total honesty and transparency. That is why before I ever started blogging, I decided that I would share all of my own financial stats. I do this not to brag, but instead to inspire motivate, and also to hold myself accountable. My goal is to be a beacon of hope, motivation, and inspiration, for you, the reader, by living life by example and sharing it all here on the blog. My sincere hope is that you will be able to learn from me - both from my successes and my failures! Read More



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14 Responses

  1. Awesome work and analysis of your expenses!
    I didn’t quite get the outcome of the solar panel situation. So you kind of made your investment back after 4 years, now it doesn’t cover your increased electricity usage. I assume that means it is still saving you roughly 2,500 a year though! That’s fantastic…

    1. J – that is almost correct. The payback was about five years because the annual savings didn’t start at $2,500 per year. The extra solars will save us an additional $830 per year for a total of $3,330 per year.

  2. GYFG, I come for the analysis, but stay for the graphics. Your table game is strong, as always, got the fonts, colors, and best of all, readability. Always enjoy your charts, too, but sometimes it is good to leave us readers wanting more and thinking “where’s the chart?” instead of “there’s the chart!”

    Am liking the cost-elimination discipline the GYFG household is showing. As the accompanying graphic demonstrates, sometimes there is nothing to do but wait. ‘Patience’ is really the ability to deal with discomfort. We’re all just trying, in the meantime, to stay out of the financial ‘Shart Zone!’

    The comment in this post that really stood out to me is your observation that the consequences of the pandemic will be impacting real estate. I’ve watched decades of ‘financial engineering’ of debt-and-assets, and the results are not a surprise. I do wonder what will happen to the bank-corporation-individual chain, when the ability to service debt on an unmovable-and-depreciating asset ends.

    Some very striking transactions will be coming available in the next decade, and the “deals” will be available for people, like you, that have cash to trade. Looking forward to your future post concerning the ‘unusual opportunity’ ahead, you really know how to build anticipation!

    1. Thanks, JayCeezy!

      I’m glad after almost six years of blogging I’m still on point! The financial “Shart Zone” makes me think of that graphic you sent me a while back.

      It’s interesting, because my wife is in the Real Estate business, and so far has not seen the impact…yet!!! I believe there will be great deals in the future for the prudent and patient, but isn’t that always the case?

  3. My family is able to save a boatload in everyday expenses now compared to before the shelter-at-place.

    We cut out eating out, date night, dry cleaning, haircuts and a host of other things at this time to try to limit contact with strangers.

    It’s nice to see solar working out for you. My guess is that’s the future of energy source going forward to power homes and cars. It’s easy to install and the sun provides an unlimited source of energy.

  4. Woah! 42% reduction in spend is huge. Congratulations. The solar part seems interesting and I might finally run some numbers for my own situation. Last I checked it would make sense only if my electric bill was over $100/month. Since my single family house has gas usage we do not need a lot of electricity.

    Glad to know you and the family are doing well.

  5. Awesome! We’re on an electric well for water, so we also qualify for the max. We have looked at solar before but never really made sense of the financial gain for us, given our bill is only $150 a month. With this program, we’re now in contract with Tesla for solar and the powerwalls. If everything goes smoothly (so far, so good), we’ll net about $1,200 after the SGIP rebate and the federal credit!

      1. What’s the status on your Tesla install? Tesla is taking FOREVER for us, and just submitted the SGIP rebate reservation request today. Their communication has been less than stellar, but it looks like we’re moving forward. Would love to know how yours is going.

        1. Hey Aerin,

          We just got sign off on the 2nd solar system we installed as part of the expansion. We also received confirmation from the SGIP that our funds have been secured in the amount of $26,400 for our project.

          The company I’m using for installation is supposed to lock down an install date for our batteries by the end of the week.

          I’m hoping to have it all buttoned up by the end of the month.


            1. Following up that our panels and batteries were installed today! We paid the deposit last May… Covid took a major chunk of time, and everything has been stalled. Our SGIP was reserved, so hopefully we’ll have her soon. I’ll report back.

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