I ask this question, because I want you to think of all the places, things, and people your money is invested in. Is your money invested in one thing, or is it invested in many different things? Is your money invested in items that go up in value, or are you simply pouring your money into things that constantly depreciate (go down/lose) in value?
I sat and answered this question myself, and noted that I have invested my money in items that increase in value (savings account, retirement accounts, health savings account, etc.). I noted that I did not have a lot of my money invested in clothing, shoes, electronics, etc. It is understandable that people acquire items for their comfort, which is ok. However, to determine if the item you purchased is a depreciating asset, ask yourself this question: If you were to sell that item, would it be worth the same or more than you bought it for? If your answer is yes, then lucky you, you have a good investment. However, if your answer is no, then you have a depreciating asset on your hands.
If you have depreciating assets, you want to limit them to a few, and move towards acquiring more appreciating assets. You don’t build wealth from depreciating assets, you only lose money. You build wealth and grow your money when the items you invest in go up in value. Take the time today to assess your personal financial situation, and think of ways to increase your appreciating assets and reduce or limit your depreciating assets.
If you have any questions or comments, please leave them below.