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Cars as Investments

February 8, 2009 by Eric Rosenberg

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When I worked at the bank, I noticed something interesting. All of the officers had cars worth less than the regular employees. I knew that officers made more than non-officers. I always wondered why people who make less have cars worth more.

I figured it out one day. All of the officers had nice, reliable cars. They were not bad by any means, but they were not flashy and expensive. One of the guys made a comment about it. “Cars are depreciating assets.”

While the officers did not have cars that were flashy, they all had nicer homes and condos. The non-officers almost all rented. Real estate is an appreciating asset.

If you buy a car for $15,000, it is worth less every day. If you buy a home for $200,000, it will generally be worth more. Cars go down, homes go up.

When deciding what to do with your money, do not go put it in cars. I can’t make that as an umbrella statement. Do put your money in cars if you can afford cars that go up in value (like a McClaren F1, only $1 million). But for most of us, real estate or securities are a much better option.

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Filed Under: Investing

About Eric Rosenberg

Eric is the founder and editor of Personal Profitability. He left his corporate finance job in 2016 to take his online side hustle full-time and now earns a six-figure online income.

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I started a little side hustle blog in 2008, and left my full-time day job as a Senior Financial Analyst to turn my side hustle into a full-time gig. Learn how I did it so you can build your side hustle. It all starts with the first dollar.

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