Updated on 08.28.14

Spending Your Money on Things that Rise in Value

Trent Hamm

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 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.


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?

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  1. Frugal Dad says:

    I like the idea of using some personal disposable income to build up a side hustle. While not guaranteed to appreciate, a personal, side business built on cash has a greater chance to succeed than one built with debt.

  2. Patrick says:

    I take and respect the point of the post, but sitting in the bank looking at coins sounds more like Mr. Burns or Silas Marner than the sort of healthy lifestyle this blog typically promotes. To each his own, but it feels against the grain here.

  3. Johanna says:

    As I understand it, many musical instruments, if they’re well made and well cared for, get better as they age. If you know enough about your instrument of choice to accurately judge its quality and value, you should be able to buy one, play it for a few years, and sell it later to make a profit or at least break even. Even if you don’t know what you’re doing, if you buy from and sell to private parties directly, you can come close enough to breaking even that whatever loss you take is more than outweighed by the enjoyment you get from owning the instrument.

  4. KC says:

    I go the baseball route, too. Its been my hobby for years and I enjoy it and know the hobby very well, particularly the market of the hobby. I don’t really do too much, especially now, with investing in baseball cards, but when I see a good deal I pick it up. The only problem is…you are dealing with cardboard. It is really fragile when you think about it. With any hobby you need to keep good receipts and records of purchases and sales in case the IRS comes calling or you need insurance records in case of fire or disaster.

  5. Someone says:

    Hmm…people who write about “investments” often mention “collectibles” like gold, art, and antiques as a category of possible consideration, but the smart ones make note that you should be an EXPERT on such things before putting money into them!

    There is a large segment of our society that has been duped into believing that “collectibles” are always a great investment. It sure is not true!! Dolls, Franklin Mint tchatchkes, most coins, “collector plates,” and Beanie Babies have all been real popular with this crowd.

    People must be CAREFUL with this category of “investment.” Think stocks are risky? Dabblers are just as likely to lose 80% or more of their money in this area as with DVDs or anything else in low demand.

  6. Anon says:

    Where does one find a reputable dealer for gold bullion, coin or otherwise?

  7. Jules says:

    What you don’t mention is that many collections also lose value. I’m not sure how Swarovski crystal and Thomas Kinkaid paintings appreciate, but I’m pretty sure that they’re not the sorts of things you should “invest” in if turning a profit is what you want. (I must be honest, though, and confess that I love Swarovski crystal thingums and would probably collect a few just because they’re pretty)

    A word on musical instruments: by and large the truly valuable instruments have already been made. This is because people have taken it upon themselves to realize that they can’t just obliterate hardwoods of the tropical rain forests just because it makes for good violins. This is not to say that there aren’t any good instruments out there–only that it is highly unlikely that any of them will appreciate in an appreciable manner.

  8. I am just wondering, how does your friend, the gold investor, spend annually for storage of his bullion collection?

    The thing I dislike about Gold is that it doesn’t generate any income, is a poor inflation hedge and costs a lot to store.

  9. Madame X says:

    Some of this sounds a bit questionable and risky– yes, all investments have some risk, but as one commetner above points out, you need to be very knowledgeable about collectibles to have any hope of makign money,and I also suspect most people who are tempted to “invest” in such things would just find this advice an excuse to overspend on collectibles just because they want them! And as an investment, they only have value when they’re sold, which is hard for many collectors to do– it means you have to let go!

  10. Ali says:

    I use a lot of my extra money on my garden. Learning how to be more self-reliant has become a bit of a hobby for my husband and I. The more we learn the more fun we have and the easier it seems to become.

  11. a conscience life says:

    I am not sure that I like this approach towards discretionary money. The point of discretionary money is that you should be able to do what you want with it (hence the name). If it was money that was instead meant for investing, then *invest* it. I understand that some investments can be enjoyable and some hobbies can reap a profit, but it seems…dangerous to start trying to force this merger — to think of hobbies in terms of monetary value. Such a take on life is myopic at best and joy-stealing at worse. To try to reduce everything to a dollar value (or to view everything in light of money) misses the whole point of life. In my mind the point should be to garner the most enjoyment possible for you and the other people around you. Money is just a tool that can be used to that end. To try to make money the end goal means that you might miss out on other things that you would otherwise enjoy.

    As an example, a person that enjoys snow skiing might spend a significant amount of money on equipment and lift tickets and get *nothing* in return, monetarily. However, they will get a significant amount of enjoyment. If this is what they truly enjoy doing *and* they have the funds set aside to do it, then what could be wrong with this behavior? All they are doing is trading one part of their life (work) for another part of their life (skiing) that they love. This seems to be a much more sound life-choice than looking around for a hobby that they only marginally enjoy, but that can (potentially) turn a profit.

  12. George says:

    Thomas Kinkaid prints, what most people can afford to collect, generally depreciate. His paintings may or may not appreciate.

    The prints are a marketing scheme and amount to very expensive posters, IMHO.

  13. Lora says:

    It sounds like taxes on land are lower in Iowa than in the state where I’ve owned land.

  14. My Journey says:

    I am not sure it fits in the category, but I love putting a few bucks a month into Prosper.com. I Don’t look at is as investing, per se, but it is something I can check out every once in a while.

    (I haven’t in a while cause of the restrictions)

  15. Really good post!

    Trent, I would add under Personal Training improving your mind and skills, not just your body.

    Education pays dividends– and I am not really talking about degrees as much as I am talking skills.

  16. Johanna says:

    @a conscience life (sic): The post doesn’t actually say (and I didn’t read it to imply) that you should NEVER spend money on things with no resale value – just that it’s something to think about when you’re deciding how to spend your discretionary money. As I interpret the post, Trent’s not saying to reduce everything to a dollar value – he’s just suggesting that you consider the dollar value.

    For example, if you’re the type of person who gets enjoyment from old comic books, then resale value is something you might consider in deciding which ones to buy. But if you’re the type of person who enjoys snowboarding more than gold coins, baseball cards, comic books, or undeveloped land outside of Des Moines, then by all means, spend your money on the snowboarding.

  17. Gregfox says:

    Wow. Buying land to just sit around on. As a city-dweller and rentor, the idea of having some space to call my own (even empty space) sounds incredible. Now I just have to move to Des Moines to afford it.

  18. Mary W says:

    I must admit I’m not crazy about most of these ideas as “investments”. With gold coins you’re buying at retail price but selling at lower wholesale price. Unless the price goes up tremendously you won’t make money. Gold prices can languish for a long time.

    Raw land cost you money every year and doesn’t necessarily go up in price quickly either.

    Energy conservation measures are great (I just got solar installed) but aren’t something you can sell if you need cash. Where I live (So Cal) the grid won’t actually pay you if you generate excess electricity – just give you credit for a subsequent month where you use more than generate.

    Nothing wrong with land or gold, but don’t expect it to turn it into profit in the short run. However, it you enjoy it and can afford it, go for it.

  19. rothsay says:

    trent asks at the end: “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?” we have heard about those that will not retain/increase. How about some ideas from readers of items that might? remember might?

  20. almost there says:

    I learned in a college art class that any mechanically mass reproduced art item is worthless as an investment. Prints that can be produced by the thousands and even signed by the artist are all marketing. I have a large mass produced fish print signed by Tracy Taylor. I like it but realize it is worthless as an investment. Now, woodblock prints numbered in limited quantity hold value because the blocks are destroyed after the exact number are printed. Most tourist areas cater to the art as investment crowd. I remember the Dali and Red Buttons and Tony Curtis and Wyland prints sold in Waikiki while I lived in Hawaii. Estes Park in Colorado is pushing the Kinkaid. Buy it if you like it and can afford it, but realize it is worthless as an investment unless you can find a likeminded sucker. My sister gave me a fish print mass produced and signed and numbered by the artist but it is worthless because he can still print thousands and issue new numbres in a different series. I feel bad that she felt it was an investment and spent over $250 on it.

  21. Corey says:

    Healthy food (i.e., not tuna surprise with American cheese)

  22. J says:

    Weightwatchers has been a great “investment” for me. It’s cheaper than a personal trainer but it’s delivering results after other means have failed me to reduce weight and get in shape.

    Another thing that MIGHT (a big MIGHT here) would be some sort of collectible car, or renovation of some sort of old car. Two major caveats are that this hobby can get expensive quickly and also that it can require a lot of work and patience — a lot more than people can ever imagine.

    Antiques can also provide similar rewards. However, they can get expensive quickly and the market can be very picky — every little thing isn’t going to make it on the Jackpot episode of Antiques Roadshow — there are hundreds of people standing around each episode with stuff that probably turns out to be worthless monetarily, but it might have tremendous sentimental value.

    I think that discretionary money should absolutely be used for discretionary means — and if your comic collection, gold coins or whatever else you might collect devalues, then it’s really important that you don’t care at all about it, because it’s something YOU like to do. For every Magic: The Gathering, there are 10 or 100 card game systems that are only worth anything as games, and not as any sort of collectible.

  23. Ankit says:

    I like the idea of personal trainer.

  24. Ann says:

    About spending money on going out to dinner…”the food is gone and it is not particularly memorable.” True enough. We definitely do not eat out much (less than once a month), but we’re going out with some friends from out of town this week to a local restaurant. While the food may not be “memorable,” we are looking forward to sitting out on the deck of the restaurant and spending some quality time together with friends, making some memories & having a few laughs. The value to me is in spending time together and having fun (also, it does not hurt to have discount gift certificates from Restaurant.com. This week $5.00 will buy us a $25.00 certificate to the restaurant we are going to. Now that is what I call a win-win for us…dinner out with friends AND big savings for our budget!).

  25. adam lehman says:

    personal trainer.


    books (education).

    energy conservation.

    simply finding a “free” hobby you enjoy. (i.e. going to local parks, hitting up bars/coffee shops for open mic night, etc….

  26. Marsha says:

    Interesting notion. Just this weekend, I was going through my library and discovering that I have several valuable first edition books. One in particular is very valuable.

    Unfortunately, I live in a metro area that is severely affected by the recession (esp real estate). I don’t think this is the best time to try to sell them off.

    Also: money spend on cds, dvds, and books can often be recouped by reselling them. You don’t actually get more than you paid, but you mitigate the cash outflow.

  27. Aaron says:

    Gold coins are not an investment; the transaction cost of buying physical chunks of gold pretty much keeps that from happening unless you’re very lucky (or can see into the future.)

    If you want to make an investment in gold, buy a gold-based mutual fund.

  28. Joan says:

    I liked this post, because it reminds me of what I’ve (fairly successfully) taught my 9-year-old daughter. You can buy a bunch of “stuff” with your discretionary money – and sometimes that’s OK – or you can buy fewer items in number that are of better quality.

    That’s not directly what you’re getting at here, but it works. My daughter, for instance, spends her money on storage boxes for her postcard collection; songs for her iPod; and Legos. She went through a phase where she wanted Littlest Pet Shop figures or Bratz or whatever, and she soon found that they didn’t hold her interest for very long.

    Lots of adults are the same way. We buy “stuff” just to have it, but don’t think about its lasting fun value. For instance, DVDs and books. I LOVE movies, and I love books. But I only spend money on the ones I want to keep around for a while. They might not have big reSALE value, but at least they have reUSE value.

    OK, off my soapbox now.

  29. Jess says:

    When searching for a bedroom set I visited an antique store that sold bed frames for $10000. I could only spend $500. So I bought a bed online.

    The person who could afford that $10000 antique bed frame 5 years ago can probably sell it for more now.

    My $500 bed frame is now not worth much at all.

    Buying antique furniture instead of new may be a good way to spend money. Except you have to have a lot of money to start with.

  30. I’m a part-time (on the side) professional musician (a guitarist). While most of my friends are spending their money on LED TVs and motorcycles, I spend my extra money on quality guitars. A bonus – the purchases are also tax-deductible!

  31. Jen says:

    The “resale value” is a good thing to CONSIDER when considering how to spend discretionary money, but it’s only part of the equation. I think it’s important to think about the cost per hour of enjoyment, and consider resale value as part of that.

    So my husband’s hobby of working on cars isn’t really that expensive when you consider that he actually does recover part or all of the money when he sells a car. And he does sell the cars. My hobby (knitting) has little or no resale value, but it’s a screamin’ good deal when you consider how long it takes me to finish a sweater that takes 60 dollars worth of yarn. Gold coins are only a great idea for a hobby if you’d really want to look at the coins. If they’re JUST an investment, are they really the best return on the dollar?

  32. Lucy R says:

    I have a friend with a gigantic baseball card collection, will he ever sell them? No. I think as with most collections-most people are unwilling to sell.

  33. k2000k says:

    I don’t expect a return from discretionary spending, if it so happens that I recoup some of the cost down the road out of something I enjoyed, then awesome.

  34. getagrip says:

    One of my goals in the near term is to take some of my discretionary income (few hundred) and buy an original work at a local art show or arts and craft fair maybe once a year. This way I support local artists, purchase something I enjoy, and won’t end up over cluttering the house with a ton of stuff (unless I make it into my 100’s).

    Chances are the local artist will never become famous and all the item will ever be worth is about what I pay for it, if that. However, I may end up with something really special I can pass down or sell later.

    A final comment, things are only ever worth what someone is willing to pay. Watching the roadshow on BBC America they mentioned how a Russian painting they gave a value of $60,000 (converted from british pounds) to a year ago wouldn’t even be likely to get a bid in today’s economy.

  35. Bill says:

    Good article trent – thanks. I am a big collector of hockey cards (being from Canada). I would also suggest Garage Saleing ( going around to garage sales- I find it exciting to uncover a bargain) and Artwork paintings etc.

    I think also the principle of diversification applies here as well.

  36. Jennifer says:

    That’s actually the same argument I use for some of my book collecting – I do historic re-enactment as a hobby, and one of the expenses for doing it well is buying books on the subject – these books are often aimed at an academic library budget and go out of print fairly quickly. Thus, if I can find the $300 out-of-print treatise on gothic art for $120 (because someone didn’t realize what they had), I get the joy of having/reading/using the book, and if I ever need money, I can probably sell it fairly easily for more than I paid for it.

  37. Kevin WIlson says:

    Things to spend “fun money” on for me, which would appreciate rather than depreciate… the garden, for one. Landscaping, especially trees and shrubs, can increase property value considerably.

    Good hand tools, especially if you can find old ones cheap at garage sales, are a joy to use and can be collectible.

    With musical instruments you definitely have to know what you’re doing. While a well made, hand built wooden string instrument with a good tone will probably continue to hold or increase its value over time, metal instruments often don’t (they wear out instead), and factory-made student instruments don’t. However, if you play the instruments, as I do my violins, you tend to get emotionally attached to them!

    How about livestock? If you have a breeding hobby, spending money on better breeding stock can very much pay for itself.


  38. Jessica says:

    I completely agree about the money spend on fitness. I used to feel really guilty about the monthly gym memberships and personal pilates training. But now that I’m pregnant, I can say that I have had zero problems, virtually no back or leg pain and all-around a great pregnancy. This is not the case with a lot of women and my doctor has said that staying fit has made a big difference. My outlook now is that you end up paying for fitness in one way or another anyway — either medical bills, physical therapy, prescriptions. Now I see it as an investment in myself.

  39. Jade says:

    Autographs! I’m nuts about going to Star Trek conventions and getting them. And I’m going to start collecting ST Hallmark ornaments as well, since I saw an ornament I bought for $12 selling for $30 in the dealer’s room at the last convention I went to. Of course, that one was unopened and hadn’t spent 10 years on my Christmas tree, but part of the value is probably that not many were made. Who knows what mine would be worth to my heirs…

    Thing about autographs… okay, this is kinda morbid, but I’ve noticed they go up in value after the person dies… Anyway, that’s how I justify plunking out $20-$50 per autograph, I enjoy collecting them and getting to briefly meet the actor in the process and see them on stage live at the convention, my heirs can probably sell them for quite a bit more.

    And to me, a good camera is also on this list. Of course the camera itself I probably can’t resell for what I paid for it, but it’s an investment in a hobby I really enjoy and might manage to make some money on someday. Or at the very least I’ll save lots of $$$ on gifts for people when I can just print nice pictures and get a nice frame on clearance at Target or Ross.

  40. Bill in Houston says:

    The problem with baseball cards and other “vintage” collectibles comes from the actual “collectability” of the item. Now that more people retain rookie cards and the like, the less value they keep. In addition, companies that create these products are packaging them especially for collectors, which doesn’t raise their value much. It only takes a major financial crisis to make people forget about collectibles and worry about paychecks.

    On the other hand, precious metals will always have a value. I prefer silver to gold for two reasons: 1) the value is not as subject to fluctuation due to the lower cost, and 2) the lower cost makes it easier to accrue. If the Obama Administration keeps printing money, we’ll see hyperinflation in the next year and it won’t be pretty.

    I’ll admit that I do collect author autographs, but only because I write for a living.

    The personal trainer idea was interesting, but I’d rather buy a book on the subject or continue my walking and bike riding.

  41. KC says:

    My sister’s hobby or labor of love is raising horses. She’s loved them since she was a little girl and now uses it as a side hustle to make money – but frankly I think if she could quit her day job and raise horses full time she’d do it in a heartbeat. But she’s an expert in this field. She breeds her horses, has an ultra sound machine, cameras set up in the barn so she can watch from home, etc. I think she’s nuts, but she loves it. What I don’t think is nuts is her healthy bank account. She also generates A LOT of tax deductions doing this and has had to seek the advice of an accountant to make the most of it. But she has done quite well with her “hobby”.

  42. indymoney says:

    Even this personal training idea quite surprising to me. After reading this, a thought crosses my mind that I should look out for a trainer ;)

  43. Matt says:

    I think investing in fine wine (Bordeaux, Burgundy, California etc…) is a great idea. You can buy Wine Futures as well to try and “time” a vintage. The great thing about this strategy is that even if the wine doesn’t appreciate in value… you can always just drink it!

  44. JASON says:

    Something I enjoy is owning stocks that can issue a share indicvidually and have that framed in my office. Anyone that has seen a share of Pixar (before Disney bought them) know what I am talking about. While owning and purchasing a stock this way is not “financially smart” I enjoy having the certificate and if dividends are reinvested there is a chance of course to sell back when needed at more than I paid. The one other thing is camera/photography. Pictures of family/friends/trips are always worth the money when looked back upon and remembering places and times.

  45. Damester says:

    Investing or collecting? Some invest via collections. Some invest IN their collections. But sometimes people collect for the sheer enjoyment of collecting, regardless of what happens to that collection at some later point.

    Collections as investments seems to be the point of your article. However, for many, collecting is NOT about investing. (Yes, if it ends up making money at some point in your “estate”, great. But that is not the primary motivation.)

    It’s about loving something and wanting it. That simple. (yes, it’s about stuff and more)

    I have several friends who are art dealers, and several who are art collectors. Of the art collectors, one is an investment collector. He buys based solely on the perceived (emphasis on “perceived”) value of something, both now and in future. He says he is prepared to lose money, but I doubt it.

    Professional art dealers, who are in it because they love art as well as want to make money, will tell you a potential buyer that they should only buy because they love something. Because there is NO guarantee of something’s future worth.

    Personally, I prefer to keep collections separate from investments.

    I really don’t believe you can tell what will/won’t be in demand; what will/won’t increase in value. Sometimes you’re lucky. But a lot more people are miserable because they spent a lot and don’t get it back.

    Collect what you love, and can afford on your discretionary monies.

    Make your investments elsewhere.

  46. Damester says:

    It doesn’t matter whether your sister is doing this “full time” or “part time.”

    Your sister’s “hobby” is not a hobby since it makes money and she takes deductions. It’s a business.

    As the IRS will tell her (if it hasn’t already), she’s gotta pay taxes on her income from that biz. The upside is that she gets to take legit biz deductions for it as well.

    And make note: If she starts losing money, the IRS will be all over her. There are limits to what you can/can’t deduct based on the income from this type of biz. And if you are in the loss column a certain number of years, you can’t take deductions. (A lot of people really say these are hobbies, but they are businesses. Hence, the issues involved with taxes.)

    I know because I have friends who are in a similar situation.

    FYI: If she is doing so well, and that’s only part time, why isn’t she doing it full time? Is she concerned about putting all her eggs in one basket? Given the economy and the nature of the horse business, I can understand her reluctance.

  47. Erin says:

    This year, I’ve “invested” in myself and paid $240/month to go to the chiropractor and repair years of bad posture. After 4 months I already feel so much better, without the use of prescriptions. At first I balked at the price. But at the practice I go to (which is run by a medical doctor and doesn’t do any of the mumbo-jumbo stuff) once you pay for the month, you can schedule as many appointments as you want. I go 3 times a week, which makes the visits only $16 a visit. After about six months, the number of recommended visits, and the cost per month, will decrease steadily until it stabilizes at about 4 visits a year. I’m hopeful that this intensive one-year “investment” will permanently decrease my visits to the doctor, my (significant) Advil usage, and the probability that I will be one of those old ladies that is permanently slouched.

  48. ryan says:


    The IRS considers whether the taxpayer had a profit motive when determining whether an activity should be treated (from a taxation perspective) as a hobby or business activity.

    That being said, it is still beneficial for the taxpayer’s activity not to be considered a hobby.

    Taxpayers are limited to deduct hobby expenses to the extent of hobby income. In the case of a business activity, the taxpayer can deduct all expenses from AGI and it is not subject to the 2% rule either.

    In either scenario, income should be reported so the government can blow it away.

  49. Holly says:

    I think you’re missing a word in your title: Spending Your Discretionary Money on Things that COULD Rise in Value. (I know it’s kind of obvious but – imo – this post doesn’t do justice to the risk involved to most of these investments.)

    Personally, I like to put money into my house. I don’t mean going overboard and taking out loans for major renovations – although those do work out for some people, I am too averse to debt. For me, it’s more about DIY projects: money for materials, a little time here and there…very reasonable cost for something that either maintains or improves the value of my home. And more importantly (to me), these improvements make it a more comfortable place to live in.

  50. DanT says:

    Setting aside the political aspects, most firearms at least keep their value over time. Many will go up in value, depending on what they are.

    If particular models/features become banned from future production, then the value of the existing ones goes up dramatically. (Simple supply and demand.)

    Also, if they have some historical tie (cowboy guns, World War II guns, etc.) then those tend to go up in value more than the average firearm as well.

  51. John says:

    Anyone else get this laughable image of Scrooge in their head when reading about the guy who goes to the bank to look at his coins? Really, what is the point of stockpiling money as this post recommends? Just food for thought.

  52. jojopuff says:

    I second the trainer. I had one for about 4 months (gave it up due to time restraints, not $$) and even in that short time it made a world of difference. More importantly, a trainer can show a novice how to exercise efficiently and without hurting yourself.

  53. Amy says:


    I used to play a regular poker game, and was up by hundreds of dollars when I quit. And I have several friends who have made thousand playing craps or 21 in Vegas.

    (Yes. I recognize that gambling is a terrible investment strategy. So are collections. But it’s fun. And Trent, if you wouldn’t be willing to recommend that people take up gambling as a moneymaking hobby, maybe you should reconsider recommending taking up collecting as a moneymaking hobby.)

  54. As a general rule of thumb, don’t bother “investing” in any product marketed as a “collectible” by its original seller. If you enjoy owning it, and don’t mind paying the asking price, go ahead, but don’t expect it to rise in resale value.

    The mass-produced items that now have significant collectible value are ones that most people *didn’t* think of saving at the time (as in the early days of comics and baseball cards) so there’s limited supply, and lasting demand. But if the primary customer base is already primed to save it, you’re going to have a much bigger supply going forward. And while a few fads grow in popularity over the years, the vast majority do not.

  55. a conscience life says:

    @ Johanna

    “it’s something to think about when you’re deciding how to spend your discretionary money”

    I guess I just fail to see why this should even be a consideration. I am much more apt to spend my discretionary income in a manner that will be most in line with my desires. I suppose that if your desire is to maximize income (or minimize outflow) then such considerations are valid. It is just a very foreign way of thinking for me.

    Perhaps this is one of those (many) things in life that we all just have to agree to disagree on. I suppose that is what makes life interesting :)

  56. Shevy says:

    Along the lines of a personal trainer would be hiring a personal assistant (or a virtual assistant) to help you on a part time basis. I’m not so much thinking of having someone pick up your dry cleaning as someone to work on the things you know you should be doing but tend to put off until they end up costing you money.

  57. Penny says:

    Dietitian appointments.

    I’ve been seeing a dietician for a while now, and while the appointments may seem expensive – I’m actually spending less money all up because I am eating proper portions and therefore need less food. Trent, I know you are passionate about food – so am I – and I actually think I am buying *nicer* food now – maybe cause I appreciate it more? And I know how to moderate my sugar intake better so I don’t feel guilty about buying and making the sweet stuff.

    It’s had other personal benefits aside from finanical – for example I am so much more organised now, have a better work/life balance and my relationship with my partner has improved because I don’t carry around my unhappiness about my weight anymore.

    But wait – heres the ironic thing – and it applies to personal trainers too – I now need a whole new wardrobe! I dropped 2-3 dress sizes and all my clothes are too big! Some things will be tailored – ‘taken in’- so I can use them again. That’s an expense I wasn’t expecting. What are your thoughts – on getting your clothes “taken in” as opposed to just buying a whole new wardrobe? The obvious answer is that I could very well “take them in” myself – and with some of the easier stuff I have done – but I don’t have the skill required for particular parts.

  58. JFR says:

    I actually spend a part of my discretionary money on getting part-time education at the university. Education as always had a good return on investment for me and fueled my personal development as well.

  59. Ariana says:

    Personal trainers are expensive. People are better off eating like broke college students and go running everyday. Now THAT is cheap weight loss!

  60. Michael says:

    Interesting post, though I’d agree with some of the other comment-writers regarding books. Admittedly, MANY books do quickly depreciate. You see those selling for a penny used on Amazon. But, a well-thought-out collection of first and limited editions has as good a chance to appreciate in value as many other collectibles.

    And, maybe I’m just missing the boat here, but I can’t see how the whole “encapsulated, graded comic” thing can really catch on with the masses. Once it’s sealed up, you can only appreciate a fragment of the whole. It somehow seems like sealing the Mona Lisa up in an opaque, chemically-neutral environment. Sure it’s less likely to be damaged, but what good is that if you can’t look at it?

    Thanks for the food for thought!

  61. Roy West, Las Vegas says:

    I put my money where it gets it’s greatest return

    — at the poker table. Then — antique radios.

  62. Mike says:

    Inflation IS an expanding money supply. Every new fiat dollar the central banks prints makes every existing dollar previous to that all the more worthless. The government wants to purposely do it MORE??

    Don’t think of inflation as “higher prices” because it costs more dollars. Think of it as “each dollar is WORTH less”, because that’s what inflation is. The more of something there is, the less it’s worth.

    They are doing this on purpose.

  63. K2ofcu says:

    I can’t help but thinking of the movie ’40 Year Old Virgin’ and all of his collections of fantasy/Star Wars like figurines dispersed in his home.
    Don’t recall the upshot of those collections in the movie, but it really doesn’t strike me as a way that I’d like to spend my DISCRETIONARY funds (which I interpret as ‘for fun not payback’).
    Am not totally against this concept, just think that balance is required.
    Pragmatically, I used to buy two boxes of Topps and Fleer (four total) of the current year’s baseball cards (one box to keep pristine, one box to break up/in case I couldn’t stand it and had to look at them! ha!). They’re all in my climate controlled storage unit (along with other household items) so imagine that they’re still ‘of value’.
    I did this only for a few years- I do know that I did it for the year of Ken Griffey, Jr’s rookie year, but suspect the market is flooded (read a story @ Upper Deck/Griffey Jr on Slate which essentially confirms this). Regardless, they’re not hurting anything, don’t need the $ they’d generate, so might as well hang on to them.

  64. Pam says:

    Great post.

    My husband and I own a comic book shop. Over the years, a lot of people have asked us what to buy “that will be worth a lot of money.” We always tell them to buy what you like to read, not what you think will make you rich.

    If a comic has “collectible” printed on the cover, you can bet that it’s not.

    Once the comic is officially graded and sealed, you can’t open the package. That ruins the appeal for us–there’s some great art and great writing out there and you’re missing out on it if it’s sealed in a plastic box.

  65. Sierra says:

    The main thing I spend my “discretionary” money on is my kids’ education, and continuing education for myself and my husband. That’s not “stuff” that can rise in value, but I do learn skills that can contribute to my income and I think investing in education for my kids will show a great return on their quality of life, and probably continue to pay off for generations in higher income and more flexibility in career options, as well as less tangible stuff like getting more joy from life.

  66. Shawn says:

    This has me thinking, as most of my discretionary spending is on books, dvds, prostitutes (gotta be truthful), electronic gizmos, etc.

    Too much of the stuff everyone lists just sits around gathering dust. Even if you’re a musician and they increased in value, how many saxophones do you want lying around the house? And sitting around looking at your money?

    In terms of things that will create real value, maybe the best way to go is donating money and/or time to worthy, credible charities?

  67. Brendan says:

    Ariana: personal trainers are not just for loosing weight. I am paying a personal trainer to help get bigger actually. I don’t think it is really fair to consider this an investment though, even though it certainly makes me healthier and more marketable. Probably better to think about personal development as separate from investment.

    If you have extra money that you want to earn a return on, why not go the easy and low-risk way of bonds or CDs?

    All this talk of collections ignores the money value of time: you really need to be passionate and dedicate quite a bit of time to your hobby if you want to hope for any kind of return. Also, if you do it systematically, as others have already pointed out, there are tax issues.

  68. Meghan says:

    A couple of my hobbies return a profit, gardening and firearms. The gardening is simple, grow and eat the food to save money on groceries, I guess this isn’t a good example of Trent’s post but the firearms. Every firearm that I have purchased has appreciated in value. One person made the comment that you have to be an expert, not true, but you must have some knowledge. For example, AR-15s (especially certain types of the lower receiver – that’s the “gun” part with the serial number) have been going up in value for a very long time…especially since the last election. It’s true that I don’t recover the funds spent on ammo, but my costs are also low due to reloading.

  69. Jenna says:

    What about jewelry? Women can really enjoy their diamonds, gold rings etc and also leave them for their children for future. Long term very good returns.

  70. Angela says:

    As I was decluttering this winter I quite by accident ran across a ‘Just Between Friends’ sale (purchase used but good condition items for kids). I signed up to participate not knowing what to expect and made $190.00 on my items I would have donated. I have taken that $190.00 and am using it to purchase more kids items at a severe discount (aka: garage sales, thrifts etc.) only to resell them again for profit in the fall. With the profits (anything over the orig. $190.00 made) I will be investing it into my kids 529 plan. My goal is a $500.00 profit in the fall.

  71. Vanessa says:

    I know of an 18 year old old who has been collecting Yu-gi-yoh cards for years. While I thought this was only a hobby for young kids, he sees this as an investment and believes that he will end up making a lot of money, and told me about cards selling for $500 on eBay!

  72. liz says:

    Your friend with the 7 acres has to pay taxes on it every year – will he still make a profit when he comes to sell ?

  73. shara says:

    My husband has a thing for the Titanic (the ship, not the movie). He has spent quite a bit of his discretionary income on buying items related to the ship. We just found out that a picture he bought of her for just over $1000 he can probably re-sell for $4000-$5000!! (and that’s just in two years). I’m feeling pretty good about his form of investment.

  74. Sharon says:

    The idea that the personal trainer will reduce your medical costs in the future is not by any means a sure thing. Getting fit is good; it can help with some long term health issues, but if they are running in your family there is no guarantee.

    Being fit will not keep you from injuring yourself on your bike; it won’t keep a drunk driver from hitting you. It won’t keep the cancer that has been building in you for the past ten years from being diagnosed. It won’t keep that autoimmune disease that runs in your family from manifesting in you. It won’t keep you from getting a nasty infection.

    By all means, work on feeling better with eating and exercise. Just don’t indulge in magical thinking!

  75. erzebet says:

    when i buy something i first think about the reuse value and only after that on the resell value.
    i spend most of my discretionary money on tuning my bike: i love to ride it and i use it everywhere. each evening i go out with her and it costs me nothing. by redesigning and building some components i also gained skills that are useful as an engineer- at least for me, i prefer to buy more expensive materials that buy those things already made

    about some comments here on the guy collecting gold coins, money- banknotes or coins- are beautiful in themselves, they are not collected for their value but also for their representation of different epochs.

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