A tablet computer with a $499 price tag will actually cost you $2,070 over your lifetime.
Your money could be worth a small fortune if you invest it instead of spending it on shopping. Here’s a quick round-up of last year’s popular holiday gifts, along with their sticker price and net lifetime cost (inflation-adjusted):
|Product||Sticker Price||Net Lifetime Cost|
|iPhone 4||$2,399 (1)||$9,940|
|2010 Ford Fusion S||$18,000||$74,600|
A little cash can snowball when left untouched for long periods of time. Investing is an extremely effective, time-tested strategy for building wealth. Most of us, though, love to spend money. In fact, the average credit card holder owes around $16,000 in credit card debt, at interest rates as high as 15%. That credit card debt doesn’t even include the student loans, car loans, and home mortgages we borrow. But by going green, you can put some cash back in your bank account.
You don’t need to be rich to start investing. Even if you earn the minimum wage, you can probably start today. The key is to start living a Greenimalist lifestyle: minimize your environmental impact, and the money will follow.
The first step is to switch to a low-carbon, low-pollution, low-cost lifestyle. Sell your car, cancel your auto insurance, sell all your possessions, cancel your cable TV, stop shopping, move to a tiny apartment, and start cooking from scratch. You’ll probably earn a few thousand dollars by selling your possessions, which you can use right away to pay off your existing debt. You’ll also spend less than you earn; store the surplus in investments.
Don’t hesitate to sell your possessions. Most of the stuff you own is practically worthless. Unlike investments, possessions usually depreciate over time. An iPod Touch once priced at $199 in 2008 is worth less than $99 today. In as little as 3 years, it has lost 50% of its value. After a decade, it’ll be totally worthless. But if you sell the iPod today, you can reclaim most of your money back and store it into investments, which will appreciate over time. $200 today could be worth $265 in a decade.
When you pick a company to invest in, choose one that is morally responsible. Look for companies that aren’t involved in abortion, deforestation, oil drilling, tobacco, alcohol, pornography, sweatshop labor, and exorbitant lending. Scripture clearly forbids Christians from charging interest from the poor (3), so don’t invest in companies that profit from personal loans (avoid credit card companies). The Bible also forbids us from committing murder and treating people inhumanely, whether poor or unborn. Avoid companies involved with abortion or embryonic stem cell research.
Investments aren’t synonymous with stocks, bonds, and mutual funds. You can invest in yourself or your own business. I’m saving up money this year to pay off student loans and to work on Greenimalist full-time. You can invest in other people by donating to charities that help the poor. If you’re a Christian, you can invest in local churches and overseas missions for an eternal impact. Investments aren’t limited to banks, and our profits aren’t limited to just ourselves.
What will you do with the money you save?
2 I used Calculator.net: the cost is the starting principle, and the interest, inflation, and tax rate is set at 7%, 4%, and 0% respectively. Compound annually.