Home > Investing > Invest in thermostats instead of stocks!

Invest in thermostats instead of stocks!


You’ve been told that programmable thermostats can save you up to 20% on you utility bills, and that it’s the right thing to do for the environment, but you still haven’t switched out the old one for a new-fangled version.

Well I’m about to rock your world.  Here’s what I’ve got for you today.

  1. Why you need a programmable thermostat
  2. How gosh darn easy they are to install
  3. Why you should invest in thermostats instead of stocks

Why do you need a new thermostat anyway?

Well it all comes down to consuming energy when you don’t need to.  The typical family is only in their homes, awake about 40% of the time, yet traditional thermostats waste energy and money by heating and cooling their home 24/7.

By turning the heater/AC off during the unused 60% of the time, the thermostat can save a significant portion of energy.  Although it takes energy to heat a home back up to a comfortable level after the temperature is set back, it always takes less energy than it would to keep the home warm the whole time. 

Many people have trouble with this concept, but once you believe the physics on this one, you will see that there are opportunities to set your thermostat back all over the place.  I set mine back when I sleep, when I’m at work, and when I”m on vacation.  It’s the number one energy efficiency improvement I tend to recommend for people looking to move the needle on their utility bills.

They are SUPER easy to install!

This DIY project is so gosh darn easy that there’s seriously only 8 steps (Consult an electrician for installation instructions).  Here’s how I replaced the old thermostat at my friend’s house.

  1. Shut off the breaker to your thermostat, and make sure you have  a simple low voltage thermostat.  I can’t stress this step enough!Thermostat1
  2. Take out the screws and remove the cover plate.  You’ll find some sweet bulbs, capacitors, and springs.  Believe it or not, this was state of the are 30 years ago. Thermostat2
  3. Take off the regulators and disconnect the four wires.  (hint: label them before you actually disconnect them) Wires
  4. Remove the back plate and check out the sweet wallpaper from the 70’s! (hint: tie something like a pen to the wires so they don’t fall back into the wall!) Wires and Wallpaper
  5. Connect the wires to the new thermostat
  6. Screw the back plate onto the wall
  7. pop the thermostat assembly onto the back plate
  8. Flip the thermostat breaker back on and let ‘er run*The Nest

Why you should invest in thermostats instead of stocks

The long term ROI for stocks is around 7% annually.  Sometimes you’ll get much more, sometimes much less, but that’s the long term average.  So how does that compare the ROI from investing in a programmable thermostat.

I’ll assume that a programmable thermostat will save you 10% (conservative) on you annual energy bill.  The average home spends $2,200/yr on energy, so 10% of that is $220/yr you’d be saving.

Since this programmable thermostat only costs around $50, and you can do the installation yourself, we are looking at a <2 hr DIY project that pays for itself in under 3 months.  That’s a 440% ROI!

So you tell me, would you rather put your money in stocks that may or may not yield a 7% ROI, or would you rather go with a zero-volatility investment that yields a 63X higher ROI.  Plus it’s the right thing to do for the environment!!!!


*This is the Nest thermostat.  It’s like a regular programmable thermostat except it’s wireless enabled and it gets smarter the more you use it  It will set back the temperatures on its own if it thinks you aren’t there.  It’s a great product, but a bit of overkill if what you’re trying to do is save money.  I believe the Nest probably saves a little bit more energy than a regular programmable thermostat, but not enough more to offset it’s additional cost.  Nest = $250, regular programmable thermostat = $50.  Both are good choices.

  1. January 4, 2013 at 7:28 PM

    Picture #4 was rather frightening to look at. The wires and the old wallpaper were both scary.

    • January 4, 2013 at 9:51 PM

      I’ll agree with you on the 60’s wallpaper, but the wires are super easy to deal with. Just remember to label the wires when you remove them. Thanks for stopping by!

  2. Sweta
    January 5, 2013 at 2:13 PM

    Craigslist Austin has a listing for the same thermostat as the one in that Amazon ad for $35. I always recommend people hit up CL before making a purchase because you can usually find what you’re looking for for way cheaper and you don’t have to pay exorbitant shipping rates.

  3. January 5, 2013 at 6:47 PM

    That’s a great point! Energy efficiency is an even better investment when you get your parts cheap on Craigslist! I love the bread machine I got for $20 on craigslist. I didn’t want to blow $100 on a bread machine, and the person I was buying it from wanted to de-clutter.

  4. January 7, 2013 at 10:23 PM

    I turned my thermostats down to 50 while I was away on my last vacation and it was so cold when I first got back, but it really did only take an hour or two to heat back up to 70, so not bad for two weeks of minimal heating bills!

    The ’60s wallpaper is adorable! I researched some programmable thermostats on Amazon only to realize that the ones I have in my place actually are programmable. I should figure out how they work at some point. So far, I’ve been *some* days manually adjusting it for when I’m not home. I got lazy after a week of that though…

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