Aug 20

Stacking Functions

stacking functions

Everything we do has a cost in terms of time, money or energy. This concept of opportunity cost is an important one. The more efficiently we use our resources, the more we have available for other things. In this way efficiency is an important tool we use to increase our freedom.

 

I loosely define freedom as the ability to spend my time as I choose. I trade my time (life energy) for money, and hope to derive happiness from trading this money for something else in the future. When we are inefficient with our money or other resources, we are really throwing away time which is our most valuable commodity.

 

Efficiency will only take us so far though. We can only become so efficient before we see diminishing returns on our investment. At some point we have to think differently.

 

Stacking Functions

As far as I can tell the term stacking functions originated or gained popularity in the permaculture community. I define it as a single input or element that serves multiple functions. When efficiency is no longer enough, we can use this more advanced tool. This is important because it is another way to maximize our freedom.

 

Let me give an example of the diminishing returns of efficiency:

 

Cars

 

Cars have a certain energy efficiency we measure in miles per gallon.

 

If you drive 10,000 miles per year, and your car gets 20 mpg, you use 500 gallons of gasoline.

 

At $3/gal that’s about $1500.

 

Divide this number by your true hourly wage and this is how much life energy you trade for this gasoline.

 

Example: At $30/hour you are spending 75 hours of your life every year working to pay for gas.

 

It’s pretty easy to make a car that gets 20 mpg. Even big lumbering trucks and minivans can sometimes accomplish this.

 

Let’s upgrade though. If we increase efficiency to 30 mpg we use 333 gallons per year or about $1000. We save $500/yr. Not bad, and not too difficult either.

 

If we bump up to 40 mpg there is some thought that has to go into the design of the car. Lighter materials, better engine design, aerodynamic considerations. It is much tougher to go from 30mpg to 40mpg than it is from 20mpg to 30mpg, just ask the car manufactures. But we are saving money on gas, right? At 40 mpg we are down to 250 gallons which is $750. We save $250…

 

Wait a minute. What’s going on here? The first 10mpg we shaved off saved us $500, but the next 10mpg only saved us $250? This can’t be right, can it?

 

What if we keep going? At 50 mpg we are getting into high tech fancy stuff. We are down to 200 gal at a price of $600. Only a savings of $150 per year compared to the 40 mpg car.

 

I even made you a super fancy table to illustrate my point:

Miles per GallonGallons per year at 10k miles$/yr @ 3$/gal
20500$1500
30333.33$1000
40250$750
50200$600

 

Alright philosopher, I get it. Where are you going with this?

At some point more efficiency does not make sense. We start spending more time and energy becoming efficient just for the sake of it. There is a diminishing return on our investment. If our goal is to save money on gas we have to look beyond efficiency. This is where we can stack functions.

 

What if instead we just try and drive less? Maybe we start combining trips in the car, carpool, walk and bike more, move closer to work, telecommute 1 or 2 days a week, etc. Maybe we could combine dropping the kids off at soccer practice with doing grocery shopping at the store which is on the way.

 

I used to drive everywhere without thinking about the cost of my time, energy and actual monetary costs. If I needed something I would drive 5 miles and take a half hour of my time. I would give no thought to stacking functions. Now at this point in my life the monetary costs are negligible, but my time is becoming more valuable.

 

By the way, it probably costs you 30-50 cents per mile you drive (plus whatever you value your time at). It is worthwhile sitting down and doing these calculations for yourself. You may start buying closer to home even if you have to pay a few more dollars for things.

 

 

A few more examples.

 

Think of a chicken.

 

A chicken will act as a source of food (eggs and meat), pest control (eating bugs), fertilizer (manure) and entertainment (have you ever spent time watching chickens? Better than most movies these days). The chicken serves multiple functions are the same time. It is similar to running 5 errands all at once rather than making 5 separate trips.

 

Turkeys are pretty entertaining too.

 

 

Another example is a fruit tree…although not nearly as entertaining as the chickens.

 

A fruit tree will eventually give you much more value in fruit each season than the original purchase price. It may also provide you with an increase in property value, and the asset (fruit) is not taxed. It is like getting a tax free dividend. Not only do you get the economic benefit of free fruit, but if strategically placed will save you money on air conditioning if it shades a window in the summer.

 

 

I will give you a final example. For the past few years I have intermittently been commuting to work via bicycle. It is roughly 30 minutes each way on my bike, and about 15 minutes by car. Many days before this I would commute by car, come home and…go on a bike ride for exercise. I know, kind of ridiculous. By combining both activities I get 60 minutes of riding in while saving 30 minutes driving. This is free time that falls in my lap. Additionally, I save money by not spending as much on gas, maintenance and depreciation on my car. It is a small change, but the small things add up.

 

 

When stacking functions in your life, be creative. Think of all the benefits: Monetary, time savings, happiness, health benefits, etc. There will be areas of value you have not considered before.

 

Your homework (yeah, this blog has occasional homework) is to find the ways that you can stack functions in your life. Please share in the comments below so we can all learn together.

19 comments

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  1. I love the stacking philosophy. In my mind I treat as a sort of free ride as I build on top each level.

    1. I’m sure this concept can be applied to accounting and tax optimization as well 😉

  2. Great post HP!, I’m an engineer by background and this reminds of the concept of curvature in the context of reaching a point of diminishing returns. In engineering it makes sense (when testing concepts) to look for curvature so you can optimize accordingly; however, the perspective you’ve shared is an interesting one around Personal Finance. Great post my friend!

    1. I had to look up curvature, haha! Thanks for the comment.

  3. Great post, I very much like the concepts of stacking functions and recognizing diminishing returns. Two examples come to mind: shopping on Amazon and grocery shopping.

    At this point, my wife and I pretty much have made shopping on Amazon into an efficiency machine for our household. We are Prime members (get everything in about 2 days), pay with a rewards-earning credit card which also provides extended warranties (Chase Freedom Unlimited), and use the Earny app to automatically request partial refunds when the item is sold anywhere cheaper for 90 days post-purchase. We get the boxes, and then put them out for recycling later. This saves us countless hours in terms of driving to stores, and also gets us very low prices.

    For grocery shopping, I think that it’s important to think of diminishing returns, since sometimes driving far to reach a cheaper store winds up costing you more time and gas money than you’re really saving. Therefore, it’s important to consider whether it’s really worth it to drive 45 minutes if the savings are not quite large.

    I like the idea of having these concepts in mind when making decisions!

    1. Good examples. I have made the mistake (and still do sometimes) of wasting time to save very little money. I’m getting better though – just gotta take my own advice 🙂

  4. Love this! I have always been one to only drive for errands when I have a bunch of places lined up and very rarely just go drive to pick up one thing (unless it is an emergency). I always attributed it to being lazy, but subconsciously I must have been using the stacking functions mindset.

    Mr. Wow rides his bicycle to work as well and quite frankly I am pretty jealous. I would love to cut down the amount of time I spend in the car, but not entirely sure how to since I have to drive all day, everyday, all around Los Angeles to get to my client’s houses. Open for suggestions if you got any.

    1. Thank you! I was recently in the LA area and my advice to you is to move 😉

      Seriously though, there are no good transportation options for LA, or at least none I can think of. I would try to live within walking/biking distance of everything. I would live my life off peak to avoid the horrible time wasting traffic. I would plan my driving around efficiency, and do as much of my work from a computer at my house as possible.

    • b on August 20, 2017 at 4:38 pm
    • Reply

    Love the fruit tree example. Gardening also is exercise and reduces anxiety and improves the mood.

    1. I think I would garden more if my back allowed it…and if I were actually good at it 🙂

  5. I like this line of thinking. The “two birds with one stone” approach saves us time, money, and sanity, so why not combine where you can? It’s a small thing, but I’ll try to use my heated oven for preparing several dishes, instead of one at a time. It keeps the house from heating up and I run the oven for less time. I love the idea of approaching cars this way, too. Fortunately I work from home, so our car usage has severely plummeted (yay!), but I know we could do better.

    1. I like to get three or four birds at a time 😉

    2. I prefer “feed two birds with one scone” 🙂

      I also enjoy batch cooking/baking to save clean up time and oven use. And getting rid of my car encourages me to think about stacking functions with each trip or simply to remove unnecessary items from my daily to-do. Since each trip requires some amount of physical activity, I am much more intentional about where, when, and why I shop. And like you mention, I will happily pay a little more to support a local business that is along/near by bike route rather than make a special trip to a far away store.

      I’ve also found that the idea of stacking functions is really helpful for weeding out the useless things in your life. For example, I think lawns are pretty dumb. Most people only step foot in their yards to mow the grass, so instead of buying back my time by hiring out lawn care, I prefer to get right to the root of the problem and implement alternatives to turf grass. My favorite is using our yard to grow fruits, vegetables, and native plants. This way our lawn is far more functional (for us and wildlife), provides us with food, and has become a fun hobby of mine.

    • Claussen Pickles on August 22, 2017 at 8:55 am
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    Love this article. As an industrial engineering, I’m constantly thinking this way both at my job and personally. My most recent stack function is using my lunch break. Instead of spending pointless time eating at my desk I’ve decided to take a quick trip over to the hardware store to pick up items I need for projects at home. It takes 30min to get there and back when I pre-purchase online ahead of time. I use the minivan because it can take in a lot of stuff, but I have to watch the weight limit. So far this has worked out great, and I just eat my lunch on the move. This has saved me a ton of time not having to make trips outside of work. Also stopping by the store as you drive by on the way home from work is also a great way to free up some time.

    1. Excellent! I think many engineers stack functions instinctively.

  6. Chickens are definitely entertaining and I love the turkey video!

    As a zero-car household, stacking functions is a must. When Mr. Grumby and I go out for evening or weekend walks, a common question is what/how many errands can we accomplish at the same time. We also both ride our bikes to work at least once a week, and it’s the perfect transportation/head-clearing/physical excercise triple stack.

    Most of our blog reading and podcast listening happens when we take public transit to work.

    When we retire next year we’re going to be home-free and bicycle touring full time. Travel lodging will be our housing and transportation by bicycle will also be our entertainment, physical exercise, and moving meditation.

    Thanks for this opportunity to collectively become more efficient … and happy!

    1. Excellent!

      Whenever I am feeling down I watch the turkey video – never fails to make me laugh.

      🙂

  7. So I’ve been biking to work daily for the past while. I took a break for a bit, but now am back at it. It’s a fantastic way to relax and free your mind for the hour or so that it takes.

    It’s weird. I actually miss it when I can’t do it anymore.

    The law of diminishing returns… there’s two sides to every coin I guess.

    1. Biking is very meditative for me. I like the rhythmic nature of it. I almost always feel happier after a bike ride.

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