@awealthofcs has an interesting article on saving for retirement in which he says:
Wealth is created by saving and investing more than you spend from your income stream. A house, boat or car are not considered an investment in terms of wealth creation because they are things that you consume today. You must pay interest, fees, maintenance costs, taxes and insurance on these personal balance sheet items.
Investing rests on the assumption that you delay current expenditures so that you have money for future expenditures. Cars and boats are depreciating assets that cost you money now. On average, housing barely keeps up with inflation over the long haul and also costs you money today.
Investing rests on the assumption that you delay current expenditures so that you have money for future expenditures. Cars and boats are depreciating assets that cost you money now. On average, housing barely keeps up with inflation over the long haul and also costs you money today.
Most people fail to understand the difference between consumption and investment. And therein lies the problem.
Source: 99 Retirement Problems
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