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I'm no financial expert, but I'm pretty sure your idea of an asset is wrong. An asset is anything that has value. An asset can be depreciating or appreciating
by dpark 10y ago
I'm no financial expert, but I'm pretty sure your idea of an asset is wrong. An asset is anything that has value. An asset can be depreciating or appreciating or neither. An investment is just a place to put money. You can buy stocks in the hope they'll increase in value rapidly. You can buy gold hoping that it will outpace inflation. You can buy bonds with negative yields in the hope that they are at least safe. These are all investments. They are also all assets.
- jfoutz 10y agoI see. I'd thought an investment was a separate and distinct thing compared to an asset, with the intention of having a higher rate of return compared to ordinary stuff. Since an investment is simply a place to put money, there really is no distinction. Seems odd, but I suppose I can accept that as a common understanding.
- dpark 10y agoI think the general expectation is that an investment will make you more money than holding cash. A new car and a gold chain are both assets but most people would not call then investments. But that's not a strict definition, because if you intentionally buy cars and gold chains with the intent of using them as a store of wealth, they are technically investments, just really bad ones.