Buffett and Einstein would agree on solar panel cash returns!

Imagine this conversation:


Warren says to Einstein, “Albert, I look for investments growing at 20%+ a year.”


Albert replies, “Using my “rule of 72 formula, I calculate you double your money every three or four years!”


Warren replies, “How do you think I became one of the richest people in the world?”

Warren Buffett quote: “Investors are always looking for stocks that are going to double in a year or two years- that’s why they want tips. Instead, they should be looking for stocks that are going to go up a more reasonable amount, such as 20% or 25% a year for the next twenty years. That’s where fortunes are made.”

“Einstein’s rule of 72”: if you divide your desired compound rate of return into 72 you get the number of years required for your investment to double. Conversely, if you divide the number of years in which you wish your investment to double into 72 you get the required compound rate of return.”

In our previous Blog: How to Double your net Income by installing Solar Panels, We established that we can create a 15%+ annual cash on cash return on the solar component of our apartment building investment by utilizing Virtual Net Metering,( Installing solar panels, then charging the tenants for their electricity). This return can increase along with electricity rate increases, eventually hitting 20%+ returns yearly for the life of the solar panels.

Number wise, I think Buffett and Einstein would both approve and appreciate the extra returns created by our “solar panels on apartment buildings” investment strategy.

Interesting Einstein story: Einstein wanted a divorce. He could not afford the money Mileva wanted for child support of their two sons. Confident that he would win the Nobel Prize for his 1905 work, he promised her that he would give her the prize money when he won, if she would grant him a divorce. Einstein won the Nobel Prize for his work on the photon (not for relativity theory). He kept his promise and gave all the money to Mileva Maric, holding up his end of the contract. She bought three apartment buildings in Zurich, one for her and one for each son.

If Mileva were alive today, I would like to think she would enjoy the extra return on her investment that net metering would bring, and be delighted to be improving the environment by not burning coal to power her electricity usage.

Steve Nauert