# Wood stoves - true cost saving



## Ashful (Aug 30, 2013)

So, I've been thinking about how "frugal" heating with wood really is. I mean, are we really saving money? I wanted to run some cost analysis, for various scenarios, from the guy who buys an expensive stove and all of his wood, to the DIY'er with an Englander. I think the data is interesting.

For the case of the oil burner, I assumed $160/year maintenance (what I pay for my service contract), and used numbers for the cost of heating with oil, published by the U.S. Energy Information Administration (EIA). The first is a statement released recently that the average homeowner heating with oil in the northeast spent $2087 on heating oil last year. I also used the EIA for my calculation of historic (and predicted) oil prices, which has them increasing $0.25 annually, with an intercept of -$24.40 in 1900.

The oil burner then takes the money they were going to put toward getting started in wood, and invests it. I compared the growth of this modest investment, minus the cost of buying oil and maintaining the oil burner each year, to the costs of starting up and maintaining wood burning. The investment growth rate came from my own 401k statement, in which my rather conservative investments had 10-year averaged annual returns between 5% and 13%, with a net yearly return of approximately 9% averaged over the last 10 years.

First, the case of the DIY'er, who may spend $1500 for a low-budget stove, build his own hearth, and install his own chimney. I put $500 in equipment, because even if he already owns a chainsaw, this is the guy who will surely be shopping for a better one, after getting into this hobby. Equipment can also include, PPE, hearth tools, whatever. I put only $150 for wood costs, as this guy scrounges his own, and is only paying fuels, fluids, chains, and depreciation on his equipment. I assumed this guy has only $50/year maintenance, whether it be gaskets, catalyst replacements, whatever. I also set this guy's oil burner maintenance real low, as he's not the type to have a service contract with the oil company, anyway.





So, this guy has spent about $6k on heating with wood, over a 20 year period. The guy who just kept his oil burner, and invested that wood stove start-up money has seen his investment grow to $12k, but with $3k'ish yearly oil bills, he's $36k in the hole. Heating with wood has saved this guy $30k over 20 years.

Scenario 2 is the polar opposite. This guy bought a new BK or Woodstock, had it professionally installed with a new hearth and chimney, and buys all of his wood. He also has a chimney sweep come out to service his stove and chimney each year. He does not need much equipment, other than a real expensive set of hearth tools, and a cheap Poulan from Lowes Depot. If he still used his oil burner, he would've had a maintenance contract on it, so that's figured in.




So, this guys investment has grown very nicely, because it was much larger to begin with. He's spent $23k on heating with wood (ouch!), while investing that money and spending the same $3k'ish/year on oil, he'd have been in the hole only $17k. Heating with oil would have been cheaper, for this guy.

The third guy is me. I inherited one stove with the house, and bought a second used. I had two chimneys relined at a net cost of $3k. I use MUCH more than average oil (previous owners paid $7k in 2011, but I had it down to $5k yearly average, on last calculation) to heat this joint, but I collect all of my own wood. I bought three new saws, cant hook, and some other fun stuff, but also sold two good saws, when figuring my equipment cost. I buy catalysts, and do have a pro check my chimneys from time to time, and figure my maintenance to average $100/year. I had a contract with my oil burner co. at $160/year. The 401k is a little irrelevant (I'm already putting away the maximum allowed by law), but I'm assuming I'd find some other place to stick that start-up money at similar rates, taxes ignored.




So, I'll spend just shy of $10k to heat this place with oil for 20 years. In the same time, that start-up money would grow to $31k, but I'd be $84k in the hole after subtracting out what I'd have spent on oil. Not bad!

I'm sure no one will be shy at poking holes in my analysis. Let me know if you want me to run your numbers.


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## BrianK (Aug 30, 2013)

The bottom line isn't always the bottom line.

Its not just about "saving" money.

Its the security of knowing that if an ice storm or other unexpected event (or financial hardship?) knocks out power/natural gas/oil, I can still heat and cook indefinitely.

Its the exercise, the lifestyle, being outside, the smell of the wood from felling to CSS to burning, the joy of being able to provide something substantial towards the well being of hearth and home by the sweat of the brow, etc. All things that modern man is desperately missing and, consciously or not, craving.


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## My Oslo heats my home (Aug 30, 2013)

I have had my current stove since 2008. The initial costs might be high considering but the long term results are better. I might put 100+/- a year on maint issues (seals, burn plates etc). Chimney sweep and chain saw costs. The wood is mostly free, and after doing this for 10 years or so now I have been able to stockpile my supply to at least 2 years in advance now. 
After looking at this in "my head" and not on paper, I would definitely say its worth it.


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## CTPipeDream (Aug 30, 2013)

Brian k I couldn't have said it better myself. There many intangables of burning wood that can't be quantified in a dollar amount. In ct last year when we had the big ice storm and everyone was out of power for a week plus I was sure glad we had the woodstove. Bottom line is you either pay out of your wallet or you pay with your sweat when it comes to home heating.


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## BrianK (Aug 30, 2013)

Here's my analysis:

I paid $950 for a lightly used used Woodstock Fireview and installed a new $120 CAT, I have $1500 in the Class A flue, stove pipe and install, I had a Stihl MS250 already but spent $400 on an additional Farm Boss, I have almost $1000 in my diesel powered splitter and spend $1000 for my 16x6 dual axle trailer (which replaced an enclosed trailer I already owned, $0 net). I've bought a cant hook, helmet/eyeshield/ear protector unit and chainsaw chaps, and various other sharpeners, tools and things that all add up to several hundred dollars. Then there's gas and oil for the saws, splitter, truck to trailer the wood, etc. That's about ~$4300 investment to get into wood burning.

Our budgeted natural gas bill has dropped about $120 per month since we installed the stove in January 2012. That's $1400 per year.

So my initial investment is paid off in about three years. We're already 1.5 years into that. In another 1.5 years, I hope to use the savings to finally insulate this drafty old house and replace windows and doors.

In the meantime wood burning has been immensely satisfying, and the peace of mind it brings me cannot be given a monetary quantification.


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## firecracker_77 (Aug 30, 2013)

BrianK said:


> Here's my analysis:
> 
> I paid $950 for a lightly used used Woodstock Fireview and installed a new $120 CAT, I have $1500 in the Class A flue, stove pipe and install, I had a Stihl MS250 already but spent $400 on an additional Farm Boss, I have almost $1000 in my diesel powered splitter and spend $1000 for my 16x6 dual axle trailer (which replaced an enclosed trailer I already owned, $0 net). I've bought a cant hook, helmet/eyeshield/ear protector unit and chainsaw chaps, and various other sharpeners, tools and things that all add up to several hundred dollars. Then there's gas and oil for the saws, splitter, truck to trailer the wood, etc. That's about ~$4300 investment to get into wood burning.
> 
> ...


 
I agree with the last line.  And you've been warmer than you would have been if you were paying for the thermostat.


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## Ashful (Aug 30, 2013)

Hey guys... I wasn't stating there aren't other reasons for burning. In fact I've said many times myself, that I'd be burning if it COST me money, which so far (2 years in), it has! You're ignoring the point of the OP, and preaching to the choir, on other valid reasons for burning wood.

I also forgot the $1k I spent on a splitter, and the fact that I still plan on using somewhere close to $2500 gallons of fuel this year (even with burning two stoves), so here's the updated analysis for my particular situation. Small changes make big differences, extrapolated over 20 years.




So, I'll only save $12k over 20 years burning wood. Hardly worth it, in my situation, if I didn't enjoy the work and exercise.


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## firecracker_77 (Aug 30, 2013)

Joful said:


> Hey guys... I wasn't stating there aren't other reasons for burning. In fact I've said many times myself, that I'd be burning if it COST me money, which so far (2 years in), it has! You're ignoring the point of the OP, and preaching to the choir, on other valid reasons for burning wood.
> 
> I also forgot the $1k I spent on a splitter, and the fact that I still plan on using somewhere close to $2500 gallons of fuel this year (even with burning two stoves), so here's the updated analysis for my particular situation. Small changes make big differences, extrapolated over 20 years.
> 
> ...


 
I agree.  I hear you...you will be better off.  And if you live in heating oil territory, it's the only way to go if you have access to trees.


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## heatwise (Aug 30, 2013)

Interesting thread, I did tally up everything years ago . My latest calculations show me spending $600 a year to heat our house. This includes 3 stoves which one is brand new and never used . Each year the cost will go down if we don't buy a different stove or anything else . I say it's worked out well for us.


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## Ashful (Aug 30, 2013)

heatwise said:


> Interesting thread, I did tally up everything years ago . My latest calculations show me spending $600 a year to heat our house. This includes 3 stoves which one is brand new and never used . Each year the cost will go down if we don't buy a different stove or anything else . I say it's worked out well for us.


 

But the question is, what was your initial investment, and how much would you spending on the alternative heat? That's the key to determining if your initial investment is doing well in wood, or if you'd have been better off putting it elsewhere.


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## SteveKG (Aug 30, 2013)

Joful said:


> I also forgot the $1k I spent on a splitter, and the fact that I still plan on using somewhere close to $2500 gallons of fuel this year (even with burning two stoves), so here's the updated analysis for my particular situation.
> 
> View attachment 109892
> 
> ...


 
Wait a minute. $2500 a year in oil even with two stoves? I would recommend moving somewhere warmer!!


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## Huntindog1 (Aug 30, 2013)

Here is my investment:

Stove $599 onsale

Misc hookup pipe $50.

Already had a nice condition masonry flue to use.

Already had a chainsaw.

Bought a wood splitter $900

Got $300 from Gov. Rebate program

Total cost $1249

Savings over electric baseboard heat $1200  - $1500 a year.

Investment was paid for in first year from the savings.


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## Ashful (Aug 30, 2013)

SteveKG said:


> Wait a minute. $2500 a year in oil even with two stoves? I would recommend moving somewhere warmer!!


 
Moderate climate, big leaky house.  We're making improvements on that, each year, but will never be completely oil free.  Last year I burned 5.5 cords + 960 gallons of oil + 50 gallons propane.


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## heatwise (Aug 30, 2013)

Ok,the investment in upgrading our heat system in the house and pay for gas heat would have been a greater expense to us  than our current wood set up.


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## Ashful (Aug 30, 2013)

Huntindog1 said:


> Here is my investment:
> 
> Stove $599 onsale
> 
> ...


 
Not sure what you mean by "total cost", or what you consider your wood collection cost to be, but here's what I figure for you. Stove install is figured as $599(+6% tax) + $50 - $300.

The big inaccuracy here is that I'm assuming $0.25 increase in oil cost per year (normalized to your cost of $1350 for 2012), which is fairly accurate for oil, but perhaps not accurate at all for your electric heating cost. In any case, based on this, I see you as spending $5400 for 20 years of wood heat, versus $22,600 for your "oil". You'll save somewhere near $17k heating with wood for 20 years, versus investing your initial $384 at 9% annual return.




Once you get away from oil, my system is not accurate. In fact, since I'm not considering all taxes, etc., my analysis is not super-accurate in any way. But it's close enough to give some idea of where you land, in the grand scheme. The biggest factor seems to be the cost of initial investment versus on-going wood procurement costs (duh). A big initial investment favors putting it in a mutual fund and continuing to use your mainstream heating (oil,electric), particularly if you have to buy your wood. If you can do your install less expensively, and pay for wood with sweat and 2-stroke mix, then you can save upwards of $20k over 20 years by heating with wood.  No great surprise, there.


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## Butcher (Aug 30, 2013)

I dont figure I'll ever get a payback for burning wood around here. L.P. is cheap in the midwest. But that being said, I like to cut wood and have a feeling of self when it comes down to it. I dont have to reliy on some speculater driving up the cost to heat my home and when the lights go out I can cook, keep warm and tell everyone else to, well, you know.


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## firecracker_77 (Aug 30, 2013)

Unless your axes and saws were given to you, I think it's only fair to throw those into the equation.  The other problem with this is we're not comparing apples to apples.  I roast with my stove...somewhere north of 75 degrees much of the time.  I would never do that with a furnace.


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## Huntindog1 (Aug 30, 2013)

Bottom line I dont really figure any cost for gathering my wood as its my hobby for fun. I save that $400 fitness center membership. LoL

I already saved enough money to cover my initial investment.

I dont have to pay the electric company $1200 to $1500 a year.


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## firecracker_77 (Aug 30, 2013)

Huntindog1 said:


> Bottom line I dont really figure any cost for gathering my wood as its my hobby for fun. I save that $400 fitness center membership. LoL
> 
> I already saved enough money to cover my initial investment.
> 
> I dont have to pay the electric company $1200 to $1500 a year.


 
Yeah...and cheaper than playing golf or membership to a country club.


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## Ashful (Aug 30, 2013)

firecracker_77 said:


> Unless your axes and saws were given to you, I think it's only fair to throw those into the equation.


I did.  See "equipment" field.



firecracker_77 said:


> The other problem with this is we're not comparing apples to apples. I roast with my stove...somewhere north of 75 degrees much of the time. I would never do that with a furnace.


 
True.  Again, you're missing the point.  This is just a simple look at some rough numbers, not a detailed analysis of your personal situation.



firecracker_77 said:


> Yeah...and cheaper than playing golf or membership to a country club.


 
Yeah, but a membership to the country club includes the use of many other facilities... and a few very good meals thrown into the monthly fee, as well.


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## firecracker_77 (Aug 30, 2013)

Joful said:


> I did. See "equipment" field.
> 
> 
> 
> ...


 
I was just saying to others to include the cost of axes, saws, chaps, mauls, etc.  I know you had that all in there.  It's easy to say...my stove was $3,000 and I paid for it in 2 years...meanwhile, there's a shop full of saws, chains, files, etc that are worth a couple grand.


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## Thomas Anderson (Aug 30, 2013)

You failed to compound inflation... it is not a linear additional cost every year but an exponential one.  Also, it's hard to predict exactly where inflation is going, but since the Federal Reserve tripled the money supply in the past five years, it's a fair bet it's going much higher in the not-too-distant future.  I don't see burning wood as superior in cost if you assume that inflation is muted and oil prices will never be impacted by black swan events.  Instead, wood is a matter of self-sufficiency, so the return is measured not in dollars, but in peace of mind.  You know that you'll be okay even if global war erupts in response to Syria or some other tinderbox in the Middle East or elsewhere or if global trade breaks down or if the currency hyperinflates or if government imposes crazy environmental laws on coal/oil/gas extraction, etc.  Also as alluded to above, you pay income and sales taxes on your purchases of oil and other fossil fuels, but your labor to cut wood is non-taxable.  And if taxes go up in the future, that's another variable in your risk equation.  If you have a good stove, a chainsaw, and a reliable wood lot or other source of wood, then you have visibility into your future costs and risks.  You don't have that with oil or electric or gas.  This is especially important if you're on a fixed income or fear that you may be downsized at some point.  The last thing you need is an inflated heating bill at the perfectly inopportune time.  So calculating the savings (or costs) using a baseline set of assumptions doesn't really do much for me.  Of course you do have to consider the possibility of no longer being able to cut wood due to injury or illness, and for this reason, wood burning remains a backup heat source for me along with propane, while solar is my primary.


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## Jags (Aug 30, 2013)

I can make it real easy.  All my equipment has been paid off years ago.  Going forward...I save over 1000 gal of propane per year.


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## Ashful (Aug 30, 2013)

Thomas Anderson said:


> You failed to compound inflation... it is not a linear additional cost every year but an exponential one.


 
It's not that I forgot to include it, but that it really did not factor into this. Increasing oil cost is largely independent of inflation. When viewing the last 10 years the hard data used in this example, it's a fairly linear trend. The regression line drawn fits P = 0.25*D-24.4, where D = todays date minus Jan. 1, 1900.  It's plenty close enough for the purpose of this analysis, as the simple week-week variation in price is way beyond the error in the trend line.


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## firecracker_77 (Aug 30, 2013)

Thomas Anderson said:


> You failed to compound inflation... it is not a linear additional cost every year but an exponential one. Also, it's hard to predict exactly where inflation is going, but since the Federal Reserve tripled the money supply in the past five years, it's a fair bet it's going much higher in the not-too-distant future. I don't see burning wood as superior in cost if you assume that inflation is muted and oil prices will never be impacted by black swan events. Instead, wood is a matter of self-sufficiency, so the return is measured not in dollars, but in peace of mind. You know that you'll be okay even if global war erupts in response to Syria or some other tinderbox in the Middle East or elsewhere or if global trade breaks down or if the currency hyperinflates or if government imposes crazy environmental laws on coal/oil/gas extraction, etc. Also as alluded to above, you pay income and sales taxes on your purchases of oil and other fossil fuels, but your labor to cut wood is non-taxable. And if taxes go up in the future, that's another variable in your risk equation. If you have a good stove, a chainsaw, and a reliable wood lot or other source of wood, then you have visibility into your future costs and risks. You don't have that with oil or electric or gas. This is especially important if you're on a fixed income or fear that you may be downsized at some point. The last thing you need is an inflated heating bill at the perfectly inopportune time. So calculating the savings (or costs) using a baseline set of assumptions doesn't really do much for me. Of course you do have to consider the possibility of no longer being able to cut wood due to injury or illness, and for this reason, wood burning remains a backup heat source for me along with propane, while solar is my primary.


 
It's interesting to mention the money supply...we have not really seen higher prices.  I bought metals some years ago and they fell off too.  We live in a casino economy where all is manipulated.


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## firecracker_77 (Aug 30, 2013)

Jags said:


> I can make it real easy. All my equipment has been paid off years ago. Going forward...I save over 1000 gal of propane per year.


 
There you go. Yours is an easy answer. Probably have to take the 1,000 gallons minus the cost of 2 stroke fuel and maintenance and that's pretty much in the black for sure.


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## Jags (Aug 30, 2013)

Over 10,000 gallons of propane not burnt.  Priceless.


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## Nick Mystic (Aug 30, 2013)

Thanks for the effort you put in on your analysis Joful. I haven't done a detailed accounting of my cost savings by burning wood for my heat, but I know it is substantial. I think a huge factor for most people in determining how much they might save is whether or not they have access to "free" wood. Meaning wood they don't have to pay for, just have to work cutting, hauling, splitting and stacking. I know I consider myself fortunate to have over eleven acres of mixed hardwood forest on my property. I can pretty much get buy just harvesting downed trees and deadwood. If I had to buy all my wood I know I'd still save money over propane heat (what our central furnace burns), but it would put a big dent in my savings. For me, I think one of the biggest factors is the satisfaction I get out of being able to supply all my heating through my own effort without spending extra money for fuel. I'm pretty handy, so this is pretty much a lifestyle for me in most of the things I do.


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## WellSeasoned (Aug 30, 2013)

This will be our 3rd year, no oil, lower electric bill, ect. Our woodstove, chimney, ect has paid for itself at the end of last heating season. This year it will pay for the splitter, with $ saved in leftovers. 

Can't forget how good it smells, going outside shirtless in the morning to get the paper, with the neighbors looking strangely at you, the exercise along with CSS, and staying warm and being able to cook if the power goes out. "Once you stack, you never go back"


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## firecracker_77 (Aug 30, 2013)

WellSeasoned said:


> This will be our 3rd year, no oil, lower electric bill, ect. Our woodstove, chimney, ect has paid for itself at the end of last heating season. This year it will pay for the splitter, with $ saved in leftovers.
> 
> Can't forget how good it smells, going outside shirtless in the morning to get the paper, with the neighbors looking strangely at you, the exercise along with CSS, and staying warm and being able to cook if the power goes out. "Once you stack, you never go back"


 
I sometimes walk outside in my boxers and my wife calls me hillbilly.


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## Backwoods Savage (Aug 30, 2013)

I've often wondered but not enough to go into a detailed analysis. It is true that we purchased a new stove 6 years ago and also put up a new chimney. Our splitter is 100% for wood heating so that is a cost, but the splitter is well over 20 years old and our maintenance cost so far is a change of oil annually and a filter. There have been no repair costs to date. We have a saw that we've had for many moons but did buy a new one last January but low cost as it is just a small saw. That is something my wife talked me into getting but I'm happy we got it. I did buy a couple pair of log tongs and a few years ago had to buy a new cant hook when ours was stolen. We also broke down and bought a trailer but it is not used 100% for wood hauling; perhaps 50% or maybe less. We cut all our wood here at home so the only cost is gas and oil for atv and saw. While we are on saws, I fail to understand why anyone cutting wood just for home use would need 3 saws. I'd gotten along with one saw for somewhere around 50 years. I also own only one saw chain per saw and see no need to buy multiple chains as that is money tied up that doesn't have to be.

I also have to add that it has been many moons since we bought oil or gas for heating purposes and I don't even remember the price we paid at the time but it was a whole lot lower than today's costs.  And like others, we do a fair amount of cooking on our wood stove and we will sometimes even heat a goodly amount of water there also. I could perhaps go on and on about this but it would serve no purpose... I'm done.


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## firecracker_77 (Aug 30, 2013)

Backwoods Savage said:


> I've often wondered but not enough to go into a detailed analysis. It is true that we purchased a new stove 6 years ago and also put up a new chimney. Our splitter is 100% for wood heating so that is a cost, but the splitter is well over 20 years old and our maintenance cost so far is a change of oil annually and a filter. There have been no repair costs to date. We have a saw that we've had for many moons but did buy a new one last January but low cost as it is just a small saw. That is something my wife talked me into getting but I'm happy we got it. I did buy a couple pair of log tongs and a few years ago had to buy a new cant hook when ours was stolen. We also broke down and bought a trailer but it is not used 100% for wood hauling; perhaps 50% or maybe less. We cut all our wood here at home so the only cost is gas and oil for atv and saw. While we are on saws, I fail to understand why anyone cutting wood just for home use would need 3 saws. I'd gotten along with one saw for somewhere around 50 years. I also own only one saw chain per saw and see no need to buy multiple chains as that is money tied up that doesn't have to be.
> 
> I also have to add that it has been many moons since we bought oil or gas for heating purposes and I don't even remember the price we paid at the time but it was a whole lot lower than today's costs. And like others, we do a fair amount of cooking on our wood stove and we will sometimes even heat a goodly amount of water there also. I could perhaps go on and on about this but it would serve no purpose... I'm done.


 
Why do women NEED 20 pairs of shoes?  They don't...guys buy tools because it's something they want...not need.


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## Grisu (Aug 30, 2013)

Thomas Anderson said:


> You failed to compound inflation... it is not a linear additional cost every year but an exponential one. Also, it's hard to predict exactly where inflation is going, but since the Federal Reserve tripled the money supply in the past five years, it's a fair bet it's going much higher in the not-too-distant future.


 
Nope. Money sitting in reserve accounts of banks at the Fed has zero impact on inflation. Only money actually spent can influence prices. 



> I don't see burning wood as superior in cost if you assume that inflation is muted and oil prices will never be impacted by black swan events. Instead, wood is a matter of self-sufficiency, so the return is measured not in dollars, but in peace of mind. You know that you'll be okay even if global war erupts in response to Syria or some other tinderbox in the Middle East or elsewhere or if global trade breaks down or if the currency hyperinflates or if government imposes crazy environmental laws on coal/oil/gas extraction, etc. Also as alluded to above, you pay income and sales taxes on your purchases of oil and other fossil fuels, but your labor to cut wood is non-taxable. And if taxes go up in the future, that's another variable in your risk equation. If you have a good stove, a chainsaw, and a reliable wood lot or other source of wood, then you have visibility into your future costs and risks. You don't have that with oil or electric or gas. This is especially important if you're on a fixed income or fear that you may be downsized at some point. The last thing you need is an inflated heating bill at the perfectly inopportune time. So calculating the savings (or costs) using a baseline set of assumptions doesn't really do much for me. Of course you do have to consider the possibility of no longer being able to cut wood due to injury or illness, and for this reason, wood burning remains a backup heat source for me along with propane, while solar is my primary.


 
Agree with the rest. Want to add that by using a renewable fuel source for heat instead of a non-renewable one you preserve assets for future generations. Who knows what our next generations will need that oil for.


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## Grisu (Aug 30, 2013)

Great analysis, will peruse it later a bit more in detail.



Joful said:


> The oil burner then takes the money they were going to put toward getting started in wood, and invests it. I compared the growth of this modest investment, minus the cost of buying oil and maintaining the oil burner each year, to the costs of starting up and maintaining wood burning. The investment growth rate came from my own 401k statement, in which my rather conservative investments had 10-year averaged annual returns between 5% and 13%, with a net yearly return of approximately 9% averaged over the last 10 years.


 
That is really a good return especially for the last 10 years. Are those numbers before or after fees? Plus, in an IRA they can grow tax-deferred but would be lower in a standard savings vehicle.


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## Trilifter7 (Aug 30, 2013)

This is great Jotul! Good job on the general thinking here, gives a good argument for those that wonder why we do it! Cost savings was my initial reason for getting into burning but the enjoyment that comes from C/S/S and being WARM in the winter has been way more rewarding. 
My stove investment is $2500 -250 tax credit. My house already had a free standing stove so I had no additional cost in hookup. I split my splitter with my brother and uncle so that only set me back $300. My dad gave me his chainsaw and tractor so that's a wash. I have not paid for a piece of wood other than equipment cost to haul and process it. 
My homes heat source is LP which is around $3-4/gal in my area. I was spending around $2000 a winter with a tstat set at 58F-60F  
Now I'm happy and much warmer at around 70F!! 

I'd be interested to see my analysis Joful.


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## Ashful (Aug 30, 2013)

WellSeasoned said:


> This will be our 3rd year, no oil, lower electric bill, ect. Our woodstove, chimney, ect has paid for itself at the end of last heating season. This year it will pay for the splitter, with $ saved in leftovers.


A lot of you guys seem to be missing the basic concept of opportunity cost.  Let's say you took the $2000, $4000, $6000, whatever that you put into that "woodstove, chimney, etc.," and invested it wisely, while just continuing to heat your house with whatever you had before, whether it be oil, electric, or propane.  Where would you be now?  Add $1475 (three years lost investment return) to the $5k you spent to install your stove, before subtracting out your saved money (oil/elec/LP)... can you still say it has "paid for itself?"



Grisu said:


> That is really a good return especially for the last 10 years. Are those numbers before or after fees? Plus, in an IRA they can grow tax-deferred bit would be lower in an standard savings vehicle.


 
Thanks!  On the fees, I didn't even dig that far.  I just pulled up my 401k fund investment rates of return summary, and took the eye-ball average of the 10 Yr. Return.  I just went back and actually plugged in my actual distributions, and I'm seeing a net 8.32% return for the last 10 years.  Not the previously quoted 9%, but not bad, considering the last 10 years!

Good point on the IRA!


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## Grisu (Aug 30, 2013)

Joful said:


> A lot of you guys seem to be missing the basic concept of opportunity cost. Let's say you took the $2000, $4000, $6000, whatever that you put into that "woodstove, chimney, etc.," and invested it wisely, while just continuing to heat your house with whatever you had before, whether it be oil, electric, or propane. Where would you be now? Add $1475 (three years lost investment return) to the $5k you spent to install your stove, before subtracting out your saved money (oil/elec/LP)... can you still say it has "paid for itself?"


 
Well put. That's the problem of not having any financial education in our schools. Nevertheless, a stove and woodheat has much less risk than a stock market return. 



> Thanks! On the fees, I didn't even dig that far. I just pulled up my 401k fund investment rates of return summary, and took the eye-ball average of the 10 Yr. Return. I just went back and actually plugged in my actual distributions, and I'm seeing a net 8.32% return for the last 10 years. Not the previously quoted 9%, but not bad, considering the last 10 years!


 
That's pretty low cost, I know of quite a few with fees in the 2 to 3% range usually putting many below the average return on a low-cost ETF.


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## Ashful (Aug 30, 2013)

Trilifter7 said:


> I'd be interested to see my analysis Joful.


 
I assumed $100/year for woodstove maintenance (debit) or $100/year on propane furnace maintenance (credit), so that's basically a wash.  I also assumed $100/ year in wood collection costs (fuels, fluids, chains, saw depreciation & maintenance).

So, your upfront investment was $2650 (install + equipment + first year's wood costs), which you could've invested elsewhere at 9%.  I didn't know what year you installed your stove, so I left that at 2003, and I also don't know what the trend on LP is (likely not the same $0.25/year linear trend oil has seen over the last ten years), but in any case...





So, based on 9% annual return, your $2650 would have been $14851 after 20 years, but after subtracting out your propane costs (again, using oil as trendline... probably very innaccurate), you'd be $32k in the hole.  Meanwhile, your wood heating has cost you $6650, for the same 20 year period.  You are justified!


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## Ashful (Aug 30, 2013)

Grisu said:


> That's pretty low cost, I know of quite a few with fees in the 2 to 3% range usually putting many below the average return on a low-cost ETF.


 
True!  My company is a little odd, in that we have a profit sharing plan instead of company match on 401k.  However, because he's not contributing to the 401k, the owner feels some obligation to provide incentive to join these funds, and so he picks up ALL of the plan and individual expenses on our 401k.  In return for that, those of us on the investment team try to choose plans which offer high value at the lowest cost.  We're strongly aligned with Vanguard, and choose a lot of index funds.  I can't say we have no managed funds (some want the target funds), but we have very few.  I don't think Vanguard has the best managed funds, anyway... they can't afford to pay the best fund managers, at their rates!


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## Trilifter7 (Aug 30, 2013)

Joful said:


> I assumed $100/year for woodstove maintenance (debit) or $100/year on propane furnace maintenance (credit), so that's basically a wash.  I also assumed $100/ year in wood collection costs (fuels, fluids, chains, saw depreciation & maintenance).
> 
> So, your upfront investment was $2650 (install + equipment + first year's wood costs), which you could've invested elsewhere at 9%.  I didn't know what year you installed your stove, so I left that at 2003, and I also don't know what the trend on LP is (likely not the same $0.25/year linear trend oil has seen over the last ten years), but in any case...
> 
> ...



Thanks Joful!! Very good to know, and interesting!!


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## Ashful (Aug 30, 2013)

Actually, thinking about it.... since I am using 10 years fore and aft of today's date, with today's date as the anchor point for the oil pricing, the trendline (being linear) doesn't even really matter.  1+2+3+4+5+6+7+8+9 = 45, but 5+5+5+5+5+5+5+5+5=45 just the same!  So, it doesn't really matter if we're talking oil, electric, LP, as long as their pricing has increased rather linearly, and we anchor on today's pricing in the middle of the date span.

I also just realized that I was accidentally calculating for 21 years, not 20.  Oh well... cut it off at 2022!


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## Soundchasm (Aug 31, 2013)

I burn in the basement because I could no longer stand working on stuff at a 60 degree ambient temperature.  Of course I enjoy it as well.  I burn upstairs to save money (I casually calculated a 5 year payback on the stove).  And we enjoy at least one room at an ambient temperature that I could never achieve with electricity.  But the other currency is time and effort, but I don't golf and such, so I'm not giving up any of that.  I like physical work as much as the next guy.

But the wood is part of a program to consume less electricity, and that includes insulation, CFL bulbs, etc.  I went and charted my electric consumption since 2002.  We're 100% electric.  2002 was 30,595KWH and 2012 was 17,881KWH.

My chart uses the average monthly temperature paired with the electric bill so I can compare the A/C as well as the heating improvements.


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## dafattkidd (Aug 31, 2013)

We save between $2,500-$3,000 in oil each year depending on winter temps. Wood heat has worked out awesomely for us. The original investment of $3,000 (-30% tax deduction in 2008) paid for itself in the first winter.  Then the second winter I had the insert I lost my job. Burning wood literally kept us out of foreclosure. Thankfully now I have a great job and we are using the money saved to do repairs to our house and hopefully raise the value of the house which is grossly under water. 
So at this point we are not investing the extra cash in the stock market, but wood heat has allowed us to keep the house in hard times, stay warmer than ever, have security that if we lose power my family is taken care of, and is helping us to climb out of the hole from the messy housing market. For us wood heat is a win!

And lastly I just friggin love it! I'm a pyro in my bones so wood heat is the healthiest outlet.


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## toddnic (Aug 31, 2013)

I ended up spending around $4,500 for the Progress Hybrid, chimney system, and the install (did most of the work myself).  I figure that I'll recoup most of the cost in the next two years since we burn about 750 gallons of propane a year ($2.40 per gallon).  I am surrounded by thousands of acres of trees so obtaining wood is very easy.  I already have an ATV, trailer, saw, etc. so at this point I have not added any equipment costs.  The way I look at it I am saving money by burning wood; the house will be warmer than when heating with propane; and I'm getting some well needed exercise in the process!


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## PapaDave (Aug 31, 2013)

Joful said:


> A lot of you guys seem to be missing the basic concept of opportunity cost. Let's say you took the $2000, $4000, $6000, whatever that you put into that "woodstove, chimney, etc.," and invested it wisely, while just continuing to heat your house with whatever you had before, whether it be oil, electric, or propane. Where would you be now? Add $1475 (three years lost investment return) to the $5k you spent to install your stove, before subtracting out your saved money (oil/elec/LP)... can you still say it has "paid for itself?"


Yep, got it.
However, when I was still "investing" in our 401k, the rate of return was no where near yours. Actually lost money.
I had a manager who watched his 401k go from over half a mil down to about 250 thou in just a few months. Poor guy. I thought he was going to stroke out.
You obviously hit the sweet spot, where some of us had to get out before it was all gone. It's only money.
Used to see articles on Yahoo about how "investing" in a 401 would net a rate of about 8% and what a great deal it was. Ra, rah, rah. Sis boom bah...humbug.
It's a good "what if" scenario. I like it.
Inversely, where would you be in that sort of scenario? Real life is what happens while you're making other plans.
Also, if no "disposable" income is available, moot point all the way around.


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## Grisu (Aug 31, 2013)

Joful said:


> True! My company is a little odd, in that we have a profit sharing plan instead of company match on 401k.


 
Not my area, but are they not wasting money? I always thought the employer's contribution to 401(k)'s was better in regards to taxes. 



> However, because he's not contributing to the 401k, the owner feels some obligation to provide incentive to join these funds, and so he picks up ALL of the plan and individual expenses on our 401k. In return for that, those of us on the investment team try to choose plans which offer high value at the lowest cost. We're strongly aligned with Vanguard, and choose a lot of index funds. I can't say we have no managed funds (some want the target funds), but we have very few. I don't think Vanguard has the best managed funds, anyway... they can't afford to pay the best fund managers, at their rates!


 
I almost guessed that you invested in Vanguard funds. I am a big believer in using low-cost, broad market funds or ETFs. There is a lot of research out there showing that 80 to 90 % of fund managers of actively managed funds are getting a worse return after fees than simple index funds. 

Just for the heck of it: How would your well-off burner do if you would only assume a 3 to 4 % return? That is probably closer to what many people achieved through the last years.


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## Ashful (Aug 31, 2013)

PapDave & Grisu... some interesting points!  Will look more at this when I'm at a computer tonight.

To papadave, if no disposable income available, you won't be buying a stove... so no analysis necessary.  Never heard of long term financing for a wood stove, but I'm sure that option is out there.


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## Huntindog1 (Aug 31, 2013)

Man you guys you do money analysis like I analyze stove designs.  We spend way too much time doing it.


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## PapaDave (Aug 31, 2013)

Joful said:


> To papadave, if no disposable income available


A stove is an investment, and a very sure rate of return is guaranteed, depending how you acquire wood.
So, folks with no disposable income shouldn't pay the gas, oil, elec. man? That's ludicrous.
I would choose to spend those dollars more wisely on a stove and get that guarantee. It continues to pay back, year after year and I get heat. Paying for gas, etc., all I get is heat. Kind of like renting.
A stove, or any other form of heat, is a neccessity, not a want.
If I could take the money I need to keep the house warm and invest it in the market, I might do that,, with your help (you seem to have a good track record).
Alternatives are fun to consider.


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## Coog (Aug 31, 2013)

Thomas Anderson said:


> You failed to compound inflation... it is not a linear additional cost every year but an exponential one.  Also, it's hard to predict exactly where inflation is going, but since the Federal Reserve tripled the money supply in the past five years, it's a fair bet it's going much higher in the not-too-distant future.  I don't see burning wood as superior in cost if you assume that inflation is muted and oil prices will never be impacted by black swan events.  Instead, wood is a matter of self-sufficiency, so the return is measured not in dollars, but in peace of mind.  You know that you'll be okay even if global war erupts in response to Syria or some other tinderbox in the Middle East or elsewhere or if global trade breaks down or if the currency hyperinflates or if government imposes crazy environmental laws on coal/oil/gas extraction, etc.  Also as alluded to above, you pay income and sales taxes on your purchases of oil and other fossil fuels, but your labor to cut wood is non-taxable.  And if taxes go up in the future, that's another variable in your risk equation.  If you have a good stove, a chainsaw, and a reliable wood lot or other source of wood, then you have visibility into your future costs and risks.  You don't have that with oil or electric or gas.  This is especially important if you're on a fixed income or fear that you may be downsized at some point.  The last thing you need is an inflated heating bill at the perfectly inopportune time.  So calculating the savings (or costs) using a baseline set of assumptions doesn't really do much for me.  Of course you do have to consider the possibility of no longer being able to cut wood due to injury or illness, and for this reason, wood burning remains a backup heat source for me along with propane, while solar is my primary.



I know the true intent in this exercise is for the purposes of financial analysis.  However, I thing TA makes a good point.  A return on investment is important but so is minimizing risk.  The current condition of our government spending and the devaluation of our currency motivates me to keep piece of mind.  If I lose power or our economy collapses, I have a back up plan.

I know this bypasses the point, but it played in heavily in my decision to by a wood stove.  

Oh, and don't forget, a gas furnace or boiler had an initial investment as well. That should really play into this equation as well.


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## RustyShackleford (Aug 31, 2013)

As far as the intangible benefits of heating with wood, I can't believe no one has mentioned this (or maybe I missed it): the radiant nature of wood heat is vastly more comfortable and satisfying than blowing hot air through the house.    Not to say that all wood heat is radiant (e.g. if you're not in the same room as the stove) or that wood is the only way to achieve radiant heat (e.g. steam radiators).


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## firecracker_77 (Aug 31, 2013)

Coog said:


> I know the true intent in this exercise is for the purposes of financial analysis. However, I thing TA makes a good point. A return on investment is important but so is minimizing risk. The current condition of our government spending and the devaluation of our currency motivates me to keep piece of mind. If I lose power or our economy collapses, I have a back up plan.
> 
> I know this bypasses the point, but it played in heavily in my decision to by a wood stove.
> 
> Oh, and don't forget, a gas furnace or boiler had an initial investment as well. That should really play into this equation as well.


 
I hate to be a Debbie downer but there was an executive order pushed through allowing for nationalization of retirement plans.  If the money is not in your possession, there is always a risk of whether it is really yours.  I think money on paper is just that until you pull it out someday.


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## KaptJaq (Aug 31, 2013)

I have two heating choices, oil or wood.  With oil at 3.75 to 4.00/gallon I chose wood.  The prior owners of the house used between 800 and 1,000 gallons a year.  I put about 2,500 dollars into a new insert and repairs on an older stove downstair.  I reduced oil use to about 200 gallons per year for DHW.  Even with the toys, gas, oil, bar oil, and whatever else I spend to support my wood burning habit I know I am ahead, I just don,t know how much ahead...

KaptJaq

ps:  the wood is all scrounged, none is paid for.  I know I spend some time to gather it but it is time I would have spent in the gym...

KJ


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## firecracker_77 (Aug 31, 2013)

RustyShackleford said:


> As far as the intangible benefits of heating with wood, I can't believe no one has mentioned this (or maybe I missed it): the radiant nature of wood heat is vastly more comfortable and satisfying than blowing hot air through the house. Not to say that all wood heat is radiant (e.g. if you're not in the same room as the stove) or that wood is the only way to achieve radiant heat (e.g. steam radiators).


 
Agree 100%.  I am very warm in the winter.  To the point of being overly warm at times.  I would never have that with a furnace.  Also, when you walk into the room with the stove, you hit the wall of heat.


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## Coog (Aug 31, 2013)

firecracker_77 said:


> I hate to be a Debbie downer but there was an executive order pushed through allowing for nationalization of retirement plans.  If the money is not in your possession, there is always a risk of whether it is really yours.  I think money on paper is just that until you pull it out someday.



I don't disagree. Not quite following your point though.


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## teutonicking (Aug 31, 2013)

I got into heating with wood primarily because of big winter storms and weeklong power failures in the dead of winter.  At first, I justified the investment in part because I thought I would save money with wood.  But in reality, I like the hobby far too much to save very much.  I have bought a lot of things that are not really necessary, but fun for me.  We also have gas in our area (which has been very cheap, at least in  the past few years).  I spent a lot on my stove, SS liner and install, hearth install modifications, splitter, chainsaw, and lots of wood racks.  I do get free wood for the most part, although there is a tremendous amount of effort cutting, splitting and stacking everything.  I bet if you factored in my time spent as an opportunity cost, it would be much cheaper to just use gas.  If you don't include the "labor" (which I don't really consider "labor" because I enjoy it and consider it a hobby/exercise, like so many others), then I figure I am recovering my investment at a rate of about $1000 a year.  But it will take a long time to pay off what I have spent.  If I end up buying a pickup truck, forget about it!--I will never be able to pay that off with my savings from free wood.  The bottom line is that I love scrounging wood, moving wood, stacking it, admiring the hard work I have put into my stacks, and most of all, burning wood.  I plan to do this for the rest of my life, as long as I am able to.  I also love having my house close to 75 degrees all winter, instead of 68 or 69.  Winter is a different experience as a result, which to me is priceless.


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## firecracker_77 (Aug 31, 2013)

Coog said:


> I don't disagree. Not quite following your point though.


 
My point was that all the talk of IRAs and 401k returns could be somewhat meaningless.  If I looked at a 10 year return, I'm way up maybe.  If I looked at that same acct in Dec. 08, my returns would have been horrible or very negative.  The stock market being high can turn on a dime and suck all the wealth right out.  Numbers on paper are just that.  And, I would not put all my eggs in one basket.  Some hard assets are always a good thing.  People on here with land are probably in some ways better off.  Land is tangible....not that funny money...can't float more land or create it on a digital printing press


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## pen (Aug 31, 2013)

Let's leave the stock market, 401k's, and general economic talk out of this room.

If I hear someone mention what they have in the bank in the hearth room, the assumption should be it's in reference to savings that are covered with a tarp or old metal roofing.

pen


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## Jack Straw (Aug 31, 2013)

I think that my stove, 2 woodsheds and my large wood lot increase the value of my home quite a bit, not sure how to calculate that though.


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## Chopernator (Aug 31, 2013)

Yeah I had 500 to 600 dollar electric bills for 3 months I put an end to that  I paid 200 for my wood stove that I have now even though I need a larger one still it beats paying out of your you know what! 
so the initial investment was around 600 dollars thats pipe and caulking the only thing I did not pay for was the tile for the hearth it was just sitting there unused.   this will be my 3rd year with wood, in return my investment paid off. 
Yes everything is electric heat and stove.  Now every year all I need to get is the rope for the door and glass.


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## Swedishchef (Aug 31, 2013)

Personally I don't save a penny.

I won't get into reasons why I burn with wood but money has* nothing* to do with it.

 $2000 for my stove, $1400 for chimney, stove pipe and installation fees. I have to buy hardwood at $225/cord (I buy 2 per year but I can cut my own softwood). A sweep around here costs $150 (so I bought a sooteater for $140). I had to buy a chainsaw (had none), safety pants, helment with shield, axes, etc.

Considering I pay an average of 6-7 cents/kWh for electricity, saving money has nothing to do with why I burn wood. My house is 4 years old, I have R25 walls, R45 in the attic, R24 full basement walls. Electricity would be cheaper if you take everything into consideration...

Andrew


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## firecracker_77 (Aug 31, 2013)

pen said:


> Let's leave the stock market, 401k's, and general economic talk out of this room.
> 
> If I hear someone mention what they have in the bank in the hearth room, the assumption should be it's in reference to savings that are covered with a tarp or old metal roofing.
> 
> pen


 
Sorry Pen...point noted.  I'm smarter than to mention anything to do with money...just got off topic a bit.


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## firecracker_77 (Aug 31, 2013)

Swedishchef said:


> Personally I don't save a penny.
> 
> I won't get into reasons why I burn with wood but money has* nothing* to do with it.
> 
> ...


 
Yeah...same here, but you can be a lot warmer than you'd be if you were controlling a thermostat.  Most people on thermostats don't crank the temps as you do on a nice full stove.


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## Swedishchef (Aug 31, 2013)

I agree the heat seems to be different! The nice advantage is having the combination of both. I normally leave the basement thermostats at 15C (my basement is 1325 sq feet) but when I get a fire going and the stove is cold, I crank the thermostats to 21 to avoid the lag of the stove warming up.... 

Andrew


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## colin.p (Aug 31, 2013)

Even though the start-up cost of wood is usually high, the upkeep is fairly low. Factor in the cost of wood (I buy mine) and I only save a pittance over oil, even though I also heat with oil. However there is the cost of oil burning equipment as well.

A furnace can last longer than 20 years, however, insurance companies have declared outright war on oil heat (at least up here in Canada) and will make you change it out on a whim. They make you replace the tank every 10 years, even if there is no sign of rust on it, just to make you buy a new one. Plus they keep changing the codes and let the oil supplier do the policing to make you update before they sell you the oil. Since 2001, I have replaced the tank twice, (the latest was replaced last year to the tune of $2000), the furnace was replaced in 2001 ($3600) and the chimney was relined in 2005 for $1000. The tank is supposed to be warranted for 30 years (Roth tank), but I was told by the installer that the insurance companies (all of the bas&^%$) will still want a new tank in 10 years.

So the outlay for the stove install ($5000) should be good for a lot longer than that, and so far (knock on wood) at least I have a ready supply of heat whether the hydro is going or not.


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## pen (Aug 31, 2013)

firecracker_77 said:


> Sorry Pen...point noted. I'm smarter than to mention anything to do with money...just got off topic a bit.


 
poo happens


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## Huntindog1 (Aug 31, 2013)

With the weird weather patterns these days its good to have a stove plus more downed trees to burn also.


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## firefighterjake (Sep 1, 2013)

firecracker_77 said:


> I sometimes walk outside in my boxers and my wife calls me hillbilly.


 
I just tell my wife that the neighbors will think they are shorts . . . she says they will know the difference.


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## HDRock (Sep 1, 2013)

Coog said:


> I don't disagree. Not quite following your point though.


If it is a contract , it is binding, and don't renege on me


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## Coog (Sep 1, 2013)

firecracker_77 said:


> My point was that all the talk of IRAs and 401k returns could be somewhat meaningless.  If I looked at a 10 year return, I'm way up maybe.  If I looked at that same acct in Dec. 08, my returns would have been horrible or very negative.  The stock market being high can turn on a dime and suck all the wealth right out.  Numbers on paper are just that.  And, I would not put all my eggs in one basket.  Some hard assets are always a good thing.  People on here with land are probably in some ways better off.  Land is tangible....not that funny money...can't float more land or create it on a digital printing press



I couldn't agree more....and even land is worthless during anarchy.  Brazil's currency went devalued almost completely over night many years ago.


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## jharkin (Sep 1, 2013)

Oh boy, I smell the can coming ....

To respond to Joful's original points... I haven't done an analysis quite like that because I inherited the stove with the house, but I did build a simple spreadsheet a couple years ago to compare the cost per BTU between wood and my natgas boiler (accounting for efficiencies and all). I use it to figure out the max Im willing to spend if I have to buy wood so at least the fuel isnt more expensive than gas. Right now that breakeven point for me is about $225/cord (gas is record cheap right now, but OTOH my gas fired steam boiler is not terribly efficient) - over the last 4 years Ive paid for about half my wood and cut/processed about half, my running average cost to date is around $150 a cord.

Now, if I do an honest analysis and include saw, gear, maintenance and parts for the stove, chimney cleanings, and try to value the cost of my time processing... wood is costing me* more* than gas. But I love the heat and the piece of mind so I don't care.


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## PapaDave (Sep 1, 2013)

Does anybody ever take into account the time , energy, and effort required to pay for the gas, oil, or electricity?
Not just what shows up on the bill. I know the return on time invested is probably better, but it just doesn't seem to be calc'd in most of the time.
Am I missing something?


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## adrpga498 (Sep 1, 2013)

Money saved burning, not sure. Friends and time spent here learning about wood burning . PRICELESS. Especially during recent hurricanes.


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