Understanding assetsPublished 12/13/2017 7:29pm, by Scholarship Media Sponsored Advertising Content
To the experts: I was having a dorm-room discussion the other day with a business-savvy friend, and I learned a lot — or, rather, I learned that there is a lot I don’t know! As sometimes happens with these things, I ended up talking to a bright guy and becoming increasingly confused. I never realized how “net worth” calculations take into account possessions like cars and boats and things like that. And I guess I never realized that all of these things are “investments” in the way that, like, stocks are — is that right? I always thought of finance as a dollars and cents thing, and never really considered that you could transfer your worth from money into physical objects (and have it grow, too!) ... can you explain how all of this works?
From the experts: Sure! Your friend is absolutely correct that calculations of net worth typical include major assets like homes. Your net worth is just that — everything you are worth — so it should include all of the things you own. You would not starve to death while driving around a Corvette, because that Corvette would be worth money, and you would be able to sell it. So it’s a part of your worth! In fact, so are some other things you wouldn’t expect. that might not immediately come to mind when we talk about finance. You’ll also have to subtract things like outstanding loans (which is why many recent college graduates technically have negative net worths). Americans tend to peak in net worth at around .
It’s true that many of the assets we’re talking about here can also grow in value. That’s the hope with any home purchase, that, in time, you may be able to sell your home for more than you bought it for. That does not always happen, but with today’s healthy real estate market, it’s a common story — . In this sense, real estate assets are just as you described them — like giant stocks. Of course, that’s not the primary reason a person might own a house, but it’s a nice perk!
With that said, not all assets are investments in the sense that they can grow in value. It would be nice if vehicles all increased in value, but the experts at said that it is extremely rare to see a vehicle of any kind go up in value. Boats, cars and other vehicles have moving parts that suffer wear and tear, which is why their values drop as soon as they are purchased by their first owners (this is why you can sometimes get a great deal by shopping for used vehicles). But, certain rare vehicles can become collector’s items and increase in value. And just as with homes, it’s important to view expensive vehicles as assets to protect the value of. Regular maintenance and care will go a long way towards preserving the value of a vehicle — and, as we just learned, that will mean better protecting your net worth.
“At the end of the day, your relationships with the people in your life will be greater assets than any material things. Take time. Be present. You'll thank yourself for it later.” ― Vironika Tugaleva