Legal Disclaimer: Don’t invest your money in things I think are a good idea without doing your own research.
That said, though you need an emergency fund, it’s not a good idea, IMHO, to keep a big pile of money in cash somewhere. Why?
- Whatever interest you’re making gets taxed at the same rate as regular income, unlike capital gains and dividends from other savings vehicles.
- However, investments that get the favored tax status are really volatile right now, and some people are losing their shirts.
- Money loses ground against inflation.
- Even as money is being whittled away by the first two bullet points, it’s not working for you.
Great, but are there any safe investments out there?
Answer: No. Nothing in life is certain, and don’t let anyone tell you otherwise.
However, ya gotta take an educated guess. And looking at clean water scarcity, “cap and trade” energy usage, etc, it seems to me a few home improvements now might make a steady income for you later. Bonus: You can impress others with your “greener than thou” credentials. So, here are a few noteworthy places to spend some money:
- A grey water recapturing system. What goes down the drain from your shower, washing machine and most sinks (NOT the kitchen or toilets) is suitable for watering your garden outside. In fact, detergents that have phosphates in them which make for great fertilizer are actually bad as discharge into rivers and oceans, so you’re doing the planet a double-favor to reuse the water on plants. You’ll save money by not using potable water outside.
- Rainwater capture. Hold now, use later. It’s soft and chlorine-free!
- Dig your own well. Void where illegal.
- Solar panels.
- Solar oven. Look on-line for detailed plans and instructions. It’s great to be able to cook your food without cooking your house on those hot days.
- Wind turbine. Again, void where illegal.
- Replace old inefficient appliances, like refrigerators, freezers, furnaces, air conditioners.
- Insulate.
- Paint the house or roof in a lighter color to reflect hot sunlight.
- Plant fruit trees near southern-exposed windows. They provide food, and they’re deciduous, so they won’t block warming sun in winter.
- Install a vegetable garden, with a compost holder.
There are more, but you get the idea. The idea is to make your home more efficient and self-reliant, even if some projects will take a few years to pay for themselves, but you’ll be more insulated by higher energy consumption taxes, food prices, etc. You also keep control of your investment money and how efficiently it’s being used. Lastly, remember that “income” from savings accrues completely tax-free. All good reasons to look to your home for investment strategies in these uncertain times.