Invest in assets that go up ... Simples

TL;DR

Many people waste their disposable income on assets that depreciate, but investing in appreciating assets like businesses or the stock market can lead to long-term growth.

Transcript

g'day and welcome to this week's video this week I'm going to reflect on a quick discussion I had with a a friend of mine in Melbourne regarding disposable income and the what they do were there were their funds now read a financial adviser was a investment training day and the comedy had was that all is he's mates in his peer group with their disp... Read More

Key Insights

• 🍉 Many individuals prioritize short-term enjoyment over long-term financial growth when it comes to disposable income.
• 👨‍💼 Investing in appreciating assets, such as businesses or the stock market, can provide passive income and potential growth.
• 😨 Cars, clothes, and electronics depreciate quickly and have limited resale value compared to investments in appreciating assets.
• 👻 Warren Buffett emphasizes the importance of investing in assets that provide passive income, allowing for financial growth even while not actively working.
• 🎁 Balancing enjoying the present and saving for the future is crucial in managing disposable income effectively.
• 😚 Different assets depreciate at different rates, but they all lose value over time.
• ✋ Investing in high-quality businesses has proven to be a reliable strategy for long-term wealth accumulation.

Questions & Answers

Q: Why do many people choose to spend their disposable income on assets that decrease in value over time?

People often prioritize short-term enjoyment and the latest trends over long-term financial growth. They may not understand the concept of appreciating assets or the potential benefits of investing in them.

Q: Can you provide an example of an appreciating asset?

One example is investing in high-quality businesses like Google or Facebook. Over time, these companies have shown significant growth and have provided investors with a higher return on their investment.

Q: Is it advisable to replace cars every few years to minimize depreciation losses?

While it is a personal choice, replacing cars every few years may not necessarily minimize depreciation losses significantly. By year three, the car has already lost a significant portion of its value, and the depreciation rate slows down afterward.

Q: Why do clothes and electronics depreciate faster than other assets?

Clothes and electronics are subject to changing fashion trends and advancements in technology. As newer models and designs come out, older ones lose value quickly. Additionally, the market for secondhand clothes and electronics is limited, resulting in even lower resale value.

Summary & Key Takeaways

• Disposable income is often spent on assets like cars and electronics that quickly lose value, unlike investments in businesses or the stock market.

• While some people prefer to have the latest gadgets and cars, the depreciation rate remains high for all assets.

• Clothes and electronics depreciate even faster than cars and have very little resale value.