Most of us spend our extra money on things that depreciate quickly in value. We go out for dinner. We buy cars. We buy gadgets. We buy books and CDs and DVDs.
All of these things depreciate in value pretty quickly. We eat dinner out – the food’s gone and it’s often not particularly memorable. Our cars and gadgets depreciate quickly, and our books and CDs and DVDs depreciate even more quickly.
We trade our money for a burst of enjoyment – and then we find ourselves with a bunch of stuff that has little value (and a spare tire).
Recently, I spent a few hours chatting with an old friend who told me he spends most of his discretionary money on his collections. He decorates his office with them and gets a ton of aesthetic appeal from them.
The kicker? Those items can be resold pretty easily, often at a profit.
This actually reminded me of my own experience during the big sell-off. Many of our collections sold for very little – we probably lost an average of 80% on our DVDs from purchase to re-sell. Yet, a few items actually recovered the money I put into them and a few earned even more – a few of my oldest Magic: the Gathering cards and several of my baseball cards actually returned a small profit on the resale, even after I got years of enjoyment out of them.
It’s a win-win – you get the personal enjoyment out of the item, plus if you need the cash later on, you can re-sell the item and at least recoup your initial investment and perhaps turn a small profit.
Inspired by all this, I started asking around, looking for ways that friends and other acquaintances spent their money on items that at least roughly held their value – or actually appreciated in value. Here are six suggestions that really stuck with me – ways that I might consider spending money in the future.
Gold bullion Every week, this guy puts $100 away into his gold fund, and every few months, he buys a pre-1934 U.S. minted gold bullion coin. He has a pretty nice stack of them, and they’re gorgeous. He has four on display in his home (two frames, each showing the front and back), while the rest are in a safe. Quite often, just for the pleasure of it, he’ll go check out his box at the bank, sit in that room, and simply look at the coins with a magnifying glass – and on a few occasions, he’s shown friends. He loves the aesthetic of the coins, plus he knows that after he passes, they’ll be worth quite a bit to his children.
Vintage certified baseball cards Two of my friends collect vintage baseball cards – a hobby I used to be engrossed in. They save their money and buy classic cards – early Topps, Goudy (1930s cards), and tobacco cards – that are certified by PSA (an authentication service that verifies that the items are legit, grades them, and encases them). These items are used for decoration – one guy uses some as decorations in his den, keeping the others in a safe place.
Land A friend of mine bought several acres of totally undeveloped land about 20 miles south of Des Moines. He goes there just to be outdoors – he clears brush, has picnics there, picks some fruit from a few naturally-growing fruit trees, and often just retreats, taking a hammock there and reading books in relative solitude for an afternoon. If he ever gets tired of it, the land retains its value – he can sell it for at least what he paid for it, if not for a nice return.
Vintage certified comics Similar to the vintage baseball cards, one can get vintage comics certified, collect them, and use them for display purposes. A line of framed comic covers can colorfully accent a room, plus give a hint as to the passions and interests in your life. The key, though, is to focus on the truly vintage (nothing recent) and truly collectible (meaning long-standing series or first issues of popular characters).
Energy efficient home improvements One person who lives in northern Iowa spends much of their disposable income improving the energy efficiency of their home. Wind turbines, solar panels, geothermal heating, tankless water heating, and other techniques provide constant sources of spending of disposable income. Each purchase, though, causes one’s energy bill to drop – and eventually to start returning money, if you’re generating more energy than you’re using and can sell it back to the grid. Even better, such purchases increase the resale value of your home, particularly if they’re low maintenance and nonintrusive.
Personal training I was surprised at this suggestion, but the argument in favor of it was compelling. A personal trainer can improve your health, which directly reduces health care expenses. A personal trainer can also improve your appearance, which, like it or not, can improve your career opportunities. One friend that uses a personal trainer says she’s quite happy to give up many other perks in the short term to keep that training – and it’s left her in better shape.
What areas might you spend your discretionary money on (meaning, money primarily used for personal enjoyment) that will retain its value or perhaps earn a return?