Depreciation vs. Appreciation
The economic impact of the African American spending power will reach $1 Trillion dollars in 2017. However, spending and investing are two separate mindsets for a person. Jay- Z captures this in his lyrical confession about his own spending habits. As he looks back on his life, he regrets making the impulse buys of fancy cars and jewelry.
I too am guilty of frivolous spending in my late 20’s. My logic was since I was and making a whopping 45K a year, I could purchase two SUV’s in 3 years or less. At a combined amount debt of over $46K. I could have purchased two or three lots in East Nashville, which now would be worth over $150K. That was less than 15 years ago. (DUMBO!!)
What’s the Mathematics Jeff?
Car Cost: $46K
Car Value in 10 years: $3K
ROI ((Value - Cost / Cost) = -93% loss of value or asset is only worth 7% of original cost
East Nashville Lots:
Lot Cost in 2001: $46K
Lot Value in 10 years: $150K
ROI = 226% (Value - Cost / Cost)
“I bought every V12 engine
Wish I could take it back to the beginnin'
I coulda bought a place in Dumbo before it was Dumbo
For like two million
That same building today is worth twenty-five million
Guess how I'm feelin'? Dumbo”s”
Jigga, I needed these rhymes in 2002!!!
Happy Thanksgiving, Family!