In the Eye of the Beholder
“Value” is a relatively abstract term when you stop to think about it. The diamond ring on your wife’s finger is worth something because society tells you it is. Really, though, what does the diamond ring do? It sparkles and makes her smile, but does it fulfill any basic need making it valuable?
Likewise for people who hoard collectibles in an attempt to witness the monetary appreciation of the collectibles and then someday sell them for a handsome profit. These people realize that there is inherent risk to this practice, because who is to say what the public will actually deem valuable within a few years?
For this reason, think twice before “investing” in something that you think is valuable, but which may not have any monetary value down the road. For example, if you want to buy a collection of first-edition comic books you should do it because you want to. You shouldn’t buy the comic books in lieu of putting money in the bank.
In other words, don’t justify a splurge by claiming it’s an investment when in fact it’s just something you want to own.
There is nothing wrong with buying sparkly diamonds or classic toys or even bricks of gold as long as these aren’t your only means by which to save for a rainy day. After all, if you find yourself in a financial crisis, what would you rather have in your corner: a nicely-padded investment account or a wall lined with limited edition collectible plates?
