Dave Ramsey would say a home theater is not an investment because it doesn’t rise in value. He might be right if you’re trying to retire off of it, however there is much more to life than retirement and there are many ways to build a home theater.
The Financial Justification
I’ve probably spent around $4000 on my home audio/video/theater system from when I got married in 2004 until now. Most of that cost was from the addition of the 115″ screen and 1080p projector. Before I got married I built my 5.1 surround speakers and huge subwoofer from components I bought at Parts Express, so that $500 or so is not included.
When my wife and I decided to upgrade to the projection system we agreed on a few financial points that helped us justify the purchase:
#1: No more movies out at the theater, except in extremely special circumstances
An evening ticket in our area for a plain-jane, non-3D, non-IMAX movie is $9.50. Add on some popcorn and a beverage for another $7.00 or so and you’re looking at $26 for a couple to go see a flick and have a snack.
#2: No cable or satellite, just broadcast TV and Netflix
We have never had cable or satellite so this wasn’t a change for us. There are plenty of good programs on broadcast TV, and we use a Home Theater PC (HTPC) as a Digital Video Recorder (DVR) to capture the broadcast shows when we’re not home (or watching another one). We use Netflix as our movie library; for $16.99/month we get 2 Blu-ray’s at home at any time and an amazing selection of titles to choose from. Brotha Tech mentions one other media source that we use:
Three words: Streaming Digital Multimedia. It is as simple as firing up your TV, DVR, computer, or gaming system, finding a TV show, movie or podcast (and I’m not talking about old reruns either, I’m talking real-time, as soon as it’s been recorded entertainment) and enjoy!
Our Netflix package has the “Instant Watch” feature, so we can stream lower-quality video instantly via our Samsung BD-P2550 Blu-ray player and our computers. We’ve also watched a few TV shows on Hulu when we missed the broadcast showing.
All of these media sources are either free, or very low cost. We spend about $20/month total for Netflix + all the electricity we use recording and watching media. Because we don’t get our media from cable or satellite we are probably saving at least $60/month.
#3: Keep the lame 32″ TV to watch normal TV
Projector lamps are expensive, $300+; because of this I didn’t want us to waste the lamp watching The Price is Right! The solution to this issue was for us to keep the 32″ CRT old-school TV we had, and use that to watch everything but movies or events like the Superbowl. This definitely saves us some money when it comes to maintenance costs.
Does it add up?
Here is an estimate of monthly costs if we were to be what I envision as a typical family consuming media:
- 3 movies per month at the theater: $78
- Cable or satellite bill: $80
- Total: $158
We spend $20/mo on Netflix, so we are “saving” $138 with the choices we’ve made. In addition to the monthly costs, we would likely have bought a new TV since ours doesn’t support DTV and is not wide-screen, so that would have been at least $400. So here’s my calculation
- System Cost ($4000) – TV we would have bought otherwise ($400): $3600
- $3600 / monthly amount we are saving ($138) = 26 month ROI
So it will take us only 26 months to “make back” our money. Now this assumes that we have no maintenance expenses (so far so good) and that we would have bought cable if I didn’t build this system (fairly unlikely, but not sure). Even if we were off somewhat, this calculation still shows that if you DIY most of your system and do it frugally that you can “make back” your money in a reasonable time-frame.
The Real Investments
Having a home theater with a freakin’ huge screen and a gigantic subwoofer allows us to:
- Have movie events at our home that friends and family enjoy
- Have more family time together. We don’t send our kid off to the babysitter so we can go to a movie. If he cries or talks during a movie it doesn’t matter (and we can rewind)
- Use our TV-watching-time more efficiently (thanks to the HTPC). We don’t watch junk shows anymore that we don’t care about because we have programs recorded that we actually want to watch
- Eat healthier food when we watch movies
- Watch more movies to expand our artistic horizons with zero additional expense
- Relax in audio/visual beauty when we’re spent after a hard day
There are other benefits that I’m sure I missed, but you get the picture. The financial portion is only one piece to consider when contemplating building a high-quality home A/V system.
How’s Your Balance Sheet?
What technologies are you using to improve your personal finance picture? How are you prioritizing financial gains versus time with family and other non-financial improvements that you can make in your life?
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