http://www.mrmoneymustache.com/2013/06/24/when-the-back-of-the-napkin-can-be-worth-millions/"Divide annual savings by the money spent to get a return on investment figure. If it’s higher than 10%, you have found a smoking good life optimization and need to put it into action. Solar panels, tankless water heaters and LED light bulbs often do well when you evaluate them this way."
OK, help me understand this, fellow Mustachios.
Does this rule apply to anything you buy? Aren't we always aiming for "breakeven" at some point, ideally immediately?
Like, I bought a huge wall-mounted foldable clothesline this year for $300. I rationalized the outlay because it's good for the environment, but I also know that if I save ~$0.25 a load, it will be 1200 loads before I make back my money! But according to MMM's assertion quoted above, if I line-dry 208 loads (4 loads a week for 52 weeks, which is very very possible with our current rate of laundry; we have small children and we use cloth versions of as much possible) at $0.25 each, I will save $52, which is...a 17% annual ROI?? (Is that right?!!)
So is the point that making 17% on my money by buying something is better than leaving it in a bank account making 1% (or even making an optimistic 10% in the stock market), because 17 > 10 > 1, therefore outsmarting my mother-in-law's general life dictum to never ever spend money at all because it's indulgent and unnecessary and naughty and you're gonna need that money later when something terrible happens?