DIY work has powerful economic forces behind it. You can participate or invest.
I broke the mirror of my pick-up. To replace it (parts, labor, taxes) my friendly dealer wanted $431. There would be a wait, as parts had to be ordered and openings in the service schedule were rare.
Impatient, I located a Chevy dealer across town with the parts in stock. They cost me $203. A YouTube video told me how to take apart a truck door. In an hour, I had the mirror up and the door up.
My effective salary during this hour: $228. Without taxes. I will not pay a cent in income or payroll taxes on this money.
Have you thought of all the ways you could earn a side income by acting like your own pro? Tax preparer, pastry chef, plumber, be all you can be. Or, if that sort of thing scares you, just invest in the DIY phenomenon. Below are suggested actions that would benefit if the DIY ramped up.
There are two reasons why he might do this. The first is that the internet is becoming increasingly efficient at finding the things you need, such as spare parts, tips and how-to videos.
The other reason, and the most important one, is the dead weight of government which rests on professional work.
I have no hard feelings towards the Chevy dealer who offered a high price for installing a mirror. At the dealership, I would pay not only for the mechanic’s time, but also for his income tax, payroll taxes, medical insurance, property tax on his space, scheduler, service manager, OSHA inspector, an accountant, a Tax CPA, a compliance team at any stockbroker that handles the dealership’s 401(k), and probably a small business administration consultant. Plus a sales tax levied on all of the above. My $203 includes sales tax, but on a much smaller freight bill.
Which companies will win and which will lose in a service economy where overhead costs are rising inexorably?
You would probably like Intuit (INTU, $370), which derives more revenue from providing DIY tax software than from providing professional labor. You would avoid H&R Block (HRB, $33)whose income composition is reversed.
You would prefer Morning Star (MORN, $228)that sells subscriptions to databases that allow retirement savers to choose their own funds, and you would reject Morgan Stanley (MS, $73)who charges gigantic sums for the same work.
you might like Williams-Sonoma (WSM, $119), who sells gear to wannabe Julia Childses. You would hesitate to Darden Restaurants (DRI, $114).
I wish I could say practice makes perfect when it comes to stock picking. This is not really the case; luck is the dominant factor. When it comes to mechanical work, however, experience pays off and early joins or disappointments eventually give way to economical results. Here are three of my recent projects.
The broken mirror
A tree collided with my 2019 Silverado, crushing the motorized side mirror on the passenger side. Can I possibly replace the part myself? A simple glance at the door was intimidating. It wasn’t at all clear how I would get access to the mirror bolts.
Google came to the rescue, with a video that matched my car model and task needs. To access the mirror bracket, remove part of the door trim, exposing hidden screws and detach the wiring harnesses by clicking some clips.
I estimate a professional mechanic could have done in 20 minutes what took me an hour. His tools would have been six feet away; I made several trips to the basement for metric sockets and so on. He wouldn’t have been so shy with prying eyes. Yet all the extra work involved in running an after-sales service operation would have made his job very expensive.
How could an investor bet on an expansion of the universe of car repair videos? The 5,784 stores of O’Reilly Automotive (ORLY, $587) serve auto parts, mainly to weekend enthusiasts. Stock to avoid: Snap-On (SNA, $196). Its tools are top quality, but, by dint of being sold almost entirely to the professional crowd, they are encrusted with those OSHA inspectors and service managers.
The broken switch
An accident broke the stem of a speed switch on my 1993 Garland range hood. The usual exercise with appliances is you type in the model number on the manufacturer’s website, get an exploded diagram of the device with part numbers and have the option of purchasing the part from the manufacturer or one of the many well-stocked parts companies. .
In Garland, a dead end. The company, primarily a supplier of stoves for restaurants and hotels, says it stopped selling to the residential market in 1999. Its website does not admit that it ever sold a ventilation hood to a consumer. It says a company in Scottsdale, Arizona will supply parts for Garland residential products, but this company informs me that they only deal in stoves, not vents.
What would a pro do next? Recommend maybe I rip the whole unit out of the ceiling and start over with a reliable brand, costing $1000 or more.
I unscrewed the electrical box. The switch bore the lettering KBMC-13BVL.
The Internet has once again jumped into the breach. Google and Nexis revealed:
—KB Electronics, a company whose founders were Knauer and Bueller, started in Brooklyn. Shortly after purchasing my stove vent, KB fled New York taxes and regulations and relocated to Coral Springs, Florida.
—The Coral Springs operation has been sold to a Japanese automotive company, Nidec Corporation.
—Nidec has dutifully curated the product line and publishes detailed spec sheets showing that, for my purposes, a KBMC-13BV will do.
—The KBMC-13BV can be found online, on Amazon and other vendors.
I did not have to replace the ventilation hood. I replaced the part for $27 including shipping and tax.
Action to like: Nidec (NJDCY, $15).
Stock to dislike: Welbilt (WBT, $24), kinsman of the treacherous Garland. An Italian group plans to buy Welbilt. If the fusion fails, WBT will sink like a cast iron cooker.
The aging radiator
A water heater can reasonably be expected to last as long as a cat. My 30 gallon Superstor, installed 20 years ago by a pro, needed to be replaced.
This plumber is now so busy that he doesn’t even answer phone calls. Could I do the work myself?
Any hobbyist can install an electric water heater. But the Superstor is indirectly heated, meaning it feeds off a loop in the central baseboard heating system. Due to some complications unique to my situation, I would do 31 joints.
Copper piping has the unfortunate characteristic of penalizing a bad joint by forcing you to rip out most of what you’ve made and start over. Very prohibited. If the odds of a seal leaking are 50 to 50, the odds of all 31 being good is 1 in 2 billion.
After sweating a lot, I got the thing installed, leak free, the first time. A real plumber would have done the job in half the time. He wouldn’t have been intimidated. Plus, he wouldn’t have had to watch YouTube videos about purging a boiler loop.
You will be surprised to hear who is the hero and who is the goat in this part of the home improvement industry. Home Depot (HD, $271) is practically synonymous with DIY. Its business model involves an underpaid, high-turnover staff that includes a handful of experts and a large number of clueless employees. This pattern works well for hammers, but it doesn’t work for plumbing supplies. There, HD competes with suppliers who have better inventory and, behind the counter, people who know the difference between a 1″ CxC fitting with stop and one without.
At least HD has some good deals? No. At one of these supply houses, I paid $1,185 including tax for the HTP Superstor plus the Honeywell thermostat. HD wants $1,771.
The company to love is an underrated wholesaler that sells to supply houses: Ferguson (FERG, $110). FERG is a bargain, at 11 times earnings versus 17 for HD.
Now, you may be curious how I got into this mishap with the tree, and I have a confession to make. I was using the truck to move a load of dirt. It was to save a landscaper’s fee.