Economics · Personal Finance

A Christmas Carol Is a Lesson in Opportunity Cost

Opportunity cost is the how you would spend your time or money if you chose your favorite alternative to the choice you are making. For example, I am tempted to add the extra sports package to my Sling TV account, but it costs an additional $11 per month. $11 doesn’t seem like much, but if put into my retirement account instead, $11 per month is $6,000-8,000 in future value. Using the 4% rule, that’s about $300 in future annual income, or about $25 per month in retirement income. So an $11 per month now costs me $25 per month later. That’s a heavy opportunity cost that one might not consider before making a seemingly small financial decision.

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Personal Finance

How Much Energy Do You Save with a Heat Pump?

Quartz published an article today titled “Want to cool your home, save money, and curb climate change? Try a heat pump“, which has some helpful tips about what a heat pump is and why it may be worth considering for your home. About a year after we bought our Central Indiana home, we converted our HVAC system from an all-electric furnace and central air system to a heat pump. Now that I have a few months worth of data, I thought today would be a great day to see what a difference it made.

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