8 ms·

We’re All Investors Now (2013)

49 points by amin 5y ago

dleslie 5y ago
I'm not sure that I agree. > An investment is when a resource is expended in order to gain profitable returns, as interest, income, or appreciation in value. Being able to spend your free time over the next year playing video games is not a profit. I'm paid for my time, and my unpaid time is incredibly valuable. Anything that increases the value of my paid time has an obvious investment gain, by the author's metric, but so does that for my unpaid time. If a purchase that I make increases the value of that unpaid time, then doesn't that constitute some form of return? Certainly, I cannot _sell_ that value, but it has served as a multiplier of value that isn't normally fungible: my happiness. > So their ROI is their happiness. So now anytime you spend money on absolutely anything it’s an investment. Which renders the word “investment” completely indistinguishable from the word “purchase”. Er, no, not at all. There are _definitely_ purchases that I must make that do not appreciably increase my happiness. Some service other needs that do not directly increase or decrease my happiness, while other purchases are necessary but misery-making.
- jrochkind1 5y ago
  Who taught us to consider our "free" or unpaid time in terms of monetary value, and why? I don't need to assign dollars and cents to my recreation or rest.
  - MattGaiser 5y ago
    It is helpful for realizing how much it costs to buy back your time. I could go grocery shopping, or I could use Instacart for about $8 or so (as long as you use a store with in-store pricing). I could drive for 7 hours and spend 80 on gas or spend 200 on a plane ticket and for the most part use the time as I please.
    - derekp7 5y ago
      How many hours of driving is the break-even for flying? 7 hours would be cutting it close, considering transportation to/from the airport, security, and waiting for boarding and post arrival. Personally my cutoff is driving long enough that it requires an overnight motel stay on the road.
      - MattGaiser 5y ago
        Personally, anything over 3 hours I tend to fly if possible, even if it is theoretically longer overall. Airport has food, washrooms, Wi-Fi, lets me walk around, and lets me work on things. Between 3 hours in a car or 3 hours in an airport and 1 on the plane, I much prefer the airport. I have never really understood the hatred people have for airports.
  - roymurdock 5y ago
    It’s economics 101 - labor vs leisure time is a fundamental division of time, which is influenced by wages and is an input into a firm or economy’s production function. Even if you don’t assign your leisure time a monetary value, someone else (an economist) will.
  - InvertedRhodium 5y ago
    I work as a contractor with milestone bonuses - my free (or unpaid) time is quite literally potential income that I'm forfeiting in order to have that lesire or recreation. Being able to quantify it in some manner gives me better perspective on whether or not the enjoyment I derive from those leisure activites are "worth it". It helps that a lot of my leisure activities are things like woodworking landscaping, carpentry, etc - so I always have the option of working instead and paying someone else to bring about the end result I'm seeking.
saurik 5y ago
> In the past decade or so I’ve noticed more and more people referring to their discretionary consumer purchases as “investments”. “I decided to invest in a new couch.” “My newest investment is an xbox one.” “I thought it would be wise to invest in a new shower curtain.” This experience really really sucks in the world of "blockchain", because often the lines get blurred and people feel like they are very very literally investing (in money, not just time or attention or interest or whatever) in products they are using: to use the product at all you often own some amount of a utility token... whose value will go up if more people like you use the product (maybe even faster enough that you make money on your holding faster than you spend it on your utility usage, which is ridiculous)... and so the incentives on forums and reviews get skewed in ways that mere paid placements could only dream about. > If you’ve thought through a purchase and decided you want something then good for you. Go get it. But don’t lie to yourself by calling it an investment. And so it arguably isn't lying anymore, and everyone is now weirdly incentivized to lie about how much they like using the product or trade around misinformation about how much better the product is than competing products, as it no longer is about helping other people find the best product--or even getting everyone onboard with a network effect on a platform which you've invested your time in (which definitely happens: you do "invest" in sites like YouTube, Facebook, Instagram, and TikTok, even as a pretty normal user)--but you actually kind of by definition of how it is set up often stand to make or lose money based on other peoples' perception :(.
- nostrademons 5y ago
  That incentive misalignment has been present for as long as people could purchase goods that have both utility today and resale or income-producing value tomorrow. It's why NIMBY policies and zoning exist ("Your home isn't just a place to live, it's an investment"), and it's why people drop hundreds of thousands on college and still often end up unemployable ("It's four years that are totally unique, and necessary for a good job" - except that you get that good job if you study an employable major, and actually study it, and you probably won't be partying a whole lot if you do that).
  - saurik 5y ago
    Sure... but you are talking about a pretty narrow slice of purchases (by quantity if not price) in the grand scheme of things. What makes this so universal and so visceral with blockchain products is that you end up in a state where even your most trivial purchases are now tokenized with some pre-sale and some kind of "play/stake/use-to-earn" monetization model attached to an underlying "asset" that people "trade" on a "market".
starkd 5y ago
When credit is cheap, everything becomes an investment. Because, hey, why not?
quickthrower2 5y ago
Thought this was going to be about Robinhood, stonks, crypto etc.
throwaway9980 5y ago
Brilliant. The financial hoi palloi also don’t seem to notice that their revenues are deemed income for tax purposes while for corporate persons revenue remains revenue and is untaxed. Corporate persons only pay taxes when they fail to ensure that there is no income at the end of the year. If only the rest of us could treat investments in couches and Xboxes as capital expenditures!
- gruez 5y ago
  >The financial hoi palloi also don’t seem to notice that their revenues are deemed income for tax purposes while for corporate persons revenue remains revenue and is untaxed. Corporate persons only pay taxes when they fail to ensure that there is no income at the end of the year. If only the rest of us could treat investments in couches and Xboxes as capital expenditures! That's because a person can consume food, entertainment, etc., but a corporation can't. It's strictly a entity that passes on profits to its owners.
  - defterGoose 5y ago
    I mean... I guarantee you that corporations buying xboxes for entertainment in the office are writing them off.
    - gruez 5y ago
      You can do that as an individual as well. You just to have a business and declare it as a business expense. Either way, the business itself isn't consuming it.
  - oldsecondhand 5y ago
    > That's because a person can consume food, You can write off a business dinner as an expense. Upper management also gets company cars, company phones, with company paid plans that they often use for private purposes as well.
- quickthrower2 5y ago
  But if I invest in an Xbox then that’s capex, so I’d only be claiming the depreciation. Better than nothing though ;-). How do I do depreciation on a beer I’m investing in? Also first time I’ve heard hoi polloi since Thatcher era.
Havoc 5y ago
I invested in Starbucks. No not shares. Medium black. Haha For some things the word does make sense though. Exercise bike etc. Or tech where you learn something
xyzelement 5y ago
As a finance person and someone who grew up poor and economizes by default - I mainly agree. An investment is something that (has a shot of) paying you more than you paid for it. From that point of view, a house is a speculative investment (there's a chance it will go up but also may not) while a car is definitely not an investment (short of very crazy things happening, value declines very quickly with time.) So I agree with the author that saying something like "I invested in a bottle of booze because booze will make me happy" is an abuse of the term investment. However, now that I am a bit grown up and have a wife and kids, I look at the concept of investment in a broader sense. To me investment is anything that will give me/my family something important and less nebulous than happiness but not as concrete as money. For example, we just paid more for a house than we would have because it's walking distance to family. There may be some minor financial benefits to this but is not the point - we didn't do it to save gas money visiting them. But I see it as an investment of a sort. I care about my kid, and I think it's good for him to grow up seeing his cousins every day. I know my wife is very happy to be near family. So while it's not a financial investment, I do see it as an investment into my child and family and that feels kinda like a real thing.
- MattGaiser 5y ago
  > short of very crazy things happening A colleague of mine bought a relatively new car back in 2019 and resold it for the same price a few months back. So we are currently in the world where crazy happens.
  - xyzelement 5y ago
    Agreed - we just bought a new car and it was out of the question to buy used because the prices were almost the same. But I think the point stands - your friend likely did not buy this car in 2019 planning to sell it for more so it's not an investment. (on the other hand, if he had anticipated covid and the chip shortage and bought cars expecting to sell them for more, that would be an investment - but that's not what people are doing)
- speeder 5y ago
  Car and crazy things: in Brazil during our last hyperinflation period, people literally bought cars as an investment, because often used car prices were just slightly behind a new car price, while other methods of investment had literally lower returns than that. A lot of people became car flippers too, bought used cars, repaired them, improved what could be improved, and sold them back, if done right sometimes for amounts that were ludicrously much more than they paid. Suffice to say, rampant inflation is NOT pretty.
djrobstep 5y ago
This is definitely a widespread phenomenon. I find this most grating when used in reference to poverty relief, eg "increasing unemployment benefits is a worthwhile investment". As if we can't raise simply raise welfare because preventing homelessness and starving children is the decent thing to do - it has to be justified as some kind of business case.
WalterBright 5y ago
> In the past decade or so I’ve noticed more and more people referring to their discretionary consumer purchases as “investments”. “I decided to invest in a new couch.” “My newest investment is an xbox one.” “I thought it would be wise to invest in a new shower curtain. A common sales technique, at least since the 1980s, is to replace the word "cost" with "investment". So, instead of "the shower curtain costs $50", it's "for an investment of $50 you get a shower curtain".
kenrick95 5y ago
Need a "(2013)" in the post
- dang 5y ago
  Added. Thanks!
the__alchemist 5y ago
I wonder if this is why the price for used items is high enough that I buy new every time.
gkop 5y ago
> It’s become so mainstream to incorrectly use the word “invest” There are literally multiple definitions of “invest” in any dictionary. This essay is annoying.
mikewarot 5y ago
Good work boots are an investment, as are good tools, assuming you use them for decades. A house is a deteriorating pile of lumber that requires periodic maintenance and also incurs a lot of taxes. Anything else called an investment, or when I'm told what I deserve... is a big red flag.
BenoitEssiambre 5y ago
Note that technically this is wrong at least if you're talking economics. In economics, what defines investment vs consumption is that the consumption value is provided over time for investment instead of immediately for consumption: https://en.wikipedia.org/wiki/Investment_(macroeconomics) https://en.wikipedia.org/wiki/Investment_(macroeconomics) Investment doesn't imply positive returns. A squirrel hiding nuts in a cache to survive the winter is investing instead of consuming, even though some of these nuts will spoil or be stolen making the returns negative. Note that GDP equals consumption + investment (sometimes the government and export/import components are broken down in the equation).
- yarky 5y ago
  [inflation enters the chat] You can buy to consume today at a lower price than you likely will in the near future, assuming serious inflation on everything. So consuming today might be a good investment since you end up with a lower cost today for a product that you will buy soon anyway, the real return will depend on the realized inflation, which in some countries is not negligible.
btown 5y ago
There's a much deeper narrative here, which is that I feel there's an increased sentiment, across socioeconomic groups, that the investment with the greatest return is the so-called "hustle" - that unique opportunity, largely (so the myth goes) a function of your own motivation and not external factors, that will catapult you into wealth and status more vividly and transformatively than any annually-compounding index-tracking savings would do. However often people in other times were shown pictures of celebrity, never before have we been bombarded so much with "started from where you are, now I'm a founder/YouTuber/influencer/multi-level marketing maven" stories. And in that context, anything that "centers" you on being able to sustainably hustle is an investment in the hustle. The gaming you do to wind down at the end of the day, the fancy dinner or vacation that will motivate you to want more of that lifestyle - all of it is an "investment" in your own mental state, no different than a business investing in good lawyers or accountants that can help avoid distracting drama. And hey, if you're in a position to actually turn that energy into concrete results, that's perfectly logical! But it's not for everybody, and I do agree with the OP that companies are taking advantage of the positioning to encourage people to go into more and more debt. The influencer economy is certainly not a zero-sum game and there's certainly not a hard cap on how it can grow, but looking society-wide I worry that expectations are so far misaligned that things are going to come to a head.
vladmk 5y ago
This guy obviously doesn't know anything about the cost of an unopened Mario Bros game for the NES #investment
Stampo00 5y ago
In spite of the author's argument, this reads as linguistic prescriptivism to me. The meaning of words changes over time. If you endeavor to hold a grudge every time language evolves, you're going to end up a pretty grumpy person. So, try yeeting the prescritivism for a while, fam. See if you vibe with it.
emmett 5y ago
This is silly. An investment is an expenditure of resources today, which pays off down the line. Dinner at a restaurant? Not an investment (unless you believe in investing in memories, which I believe stretches the metaphor slightly). An Xbox? Sure that’s an investment that pays dividends in entertainment over time. It’s a pretty short term since it’ll be obsolete in 5-7 years. Investing in a house w a neighborhood you love? Assuming you stay and love it, absolutely an investment and a long term one — maybe pays off for the rest of your life! Not all returns pay out in cash. To think otherwise is to financialize your whole life, to know the value of money but nothing else.

49 points by amin 5y ago

I'm not sure that I agree. > An investment is when a resource is expended in order to gain profitable returns, as interest, income, or appreciation in value. Being able to spend your free time over the next year playing video games is not a profit. I'm paid for my time, and my unpaid time is incredibly valuable. Anything that increases the value of my paid time has an obvious investment gain, by the author's metric, but so does that for my unpaid time. If a purchase that I make increases the value of that unpaid time, then doesn't that constitute some form of return? Certainly, I cannot _sell_ that value, but it has served as a multiplier of value that isn't normally fungible: my happiness. > So their ROI is their happiness. So now anytime you spend money on absolutely anything it’s an investment. Which renders the word “investment” completely indistinguishable from the word “purchase”. Er, no, not at all. There are _definitely_ purchases that I must make that do not appreciably increase my happiness. Some service other needs that do not directly increase or decrease my happiness, while other purchases are necessary but misery-making.

jrochkind1 5y ago
Who taught us to consider our "free" or unpaid time in terms of monetary value, and why? I don't need to assign dollars and cents to my recreation or rest.
- MattGaiser 5y ago
  It is helpful for realizing how much it costs to buy back your time. I could go grocery shopping, or I could use Instacart for about $8 or so (as long as you use a store with in-store pricing). I could drive for 7 hours and spend 80 on gas or spend 200 on a plane ticket and for the most part use the time as I please.
  - derekp7 5y ago
    How many hours of driving is the break-even for flying? 7 hours would be cutting it close, considering transportation to/from the airport, security, and waiting for boarding and post arrival. Personally my cutoff is driving long enough that it requires an overnight motel stay on the road.
    - MattGaiser 5y ago
      Personally, anything over 3 hours I tend to fly if possible, even if it is theoretically longer overall. Airport has food, washrooms, Wi-Fi, lets me walk around, and lets me work on things. Between 3 hours in a car or 3 hours in an airport and 1 on the plane, I much prefer the airport. I have never really understood the hatred people have for airports.
- roymurdock 5y ago
  It’s economics 101 - labor vs leisure time is a fundamental division of time, which is influenced by wages and is an input into a firm or economy’s production function. Even if you don’t assign your leisure time a monetary value, someone else (an economist) will.
- InvertedRhodium 5y ago
  I work as a contractor with milestone bonuses - my free (or unpaid) time is quite literally potential income that I'm forfeiting in order to have that lesire or recreation. Being able to quantify it in some manner gives me better perspective on whether or not the enjoyment I derive from those leisure activites are "worth it". It helps that a lot of my leisure activities are things like woodworking landscaping, carpentry, etc - so I always have the option of working instead and paying someone else to bring about the end result I'm seeking.

saurik 5y ago

> In the past decade or so I’ve noticed more and more people referring to their discretionary consumer purchases as “investments”. “I decided to invest in a new couch.” “My newest investment is an xbox one.” “I thought it would be wise to invest in a new shower curtain.” This experience really really sucks in the world of "blockchain", because often the lines get blurred and people feel like they are very very literally investing (in money, not just time or attention or interest or whatever) in products they are using: to use the product at all you often own some amount of a utility token... whose value will go up if more people like you use the product (maybe even faster enough that you make money on your holding faster than you spend it on your utility usage, which is ridiculous)... and so the incentives on forums and reviews get skewed in ways that mere paid placements could only dream about. > If you’ve thought through a purchase and decided you want something then good for you. Go get it. But don’t lie to yourself by calling it an investment. And so it arguably isn't lying anymore, and everyone is now weirdly incentivized to lie about how much they like using the product or trade around misinformation about how much better the product is than competing products, as it no longer is about helping other people find the best product--or even getting everyone onboard with a network effect on a platform which you've invested your time in (which definitely happens: you do "invest" in sites like YouTube, Facebook, Instagram, and TikTok, even as a pretty normal user)--but you actually kind of by definition of how it is set up often stand to make or lose money based on other peoples' perception :(.

nostrademons 5y ago
That incentive misalignment has been present for as long as people could purchase goods that have both utility today and resale or income-producing value tomorrow. It's why NIMBY policies and zoning exist ("Your home isn't just a place to live, it's an investment"), and it's why people drop hundreds of thousands on college and still often end up unemployable ("It's four years that are totally unique, and necessary for a good job" - except that you get that good job if you study an employable major, and actually study it, and you probably won't be partying a whole lot if you do that).
- saurik 5y ago
  Sure... but you are talking about a pretty narrow slice of purchases (by quantity if not price) in the grand scheme of things. What makes this so universal and so visceral with blockchain products is that you end up in a state where even your most trivial purchases are now tokenized with some pre-sale and some kind of "play/stake/use-to-earn" monetization model attached to an underlying "asset" that people "trade" on a "market".

starkd 5y ago

When credit is cheap, everything becomes an investment. Because, hey, why not?

quickthrower2 5y ago

Thought this was going to be about Robinhood, stonks, crypto etc.

throwaway9980 5y ago

Brilliant. The financial hoi palloi also don’t seem to notice that their revenues are deemed income for tax purposes while for corporate persons revenue remains revenue and is untaxed. Corporate persons only pay taxes when they fail to ensure that there is no income at the end of the year. If only the rest of us could treat investments in couches and Xboxes as capital expenditures!

gruez 5y ago
>The financial hoi palloi also don’t seem to notice that their revenues are deemed income for tax purposes while for corporate persons revenue remains revenue and is untaxed. Corporate persons only pay taxes when they fail to ensure that there is no income at the end of the year. If only the rest of us could treat investments in couches and Xboxes as capital expenditures! That's because a person can consume food, entertainment, etc., but a corporation can't. It's strictly a entity that passes on profits to its owners.
- defterGoose 5y ago
  I mean... I guarantee you that corporations buying xboxes for entertainment in the office are writing them off.
  - gruez 5y ago
    You can do that as an individual as well. You just to have a business and declare it as a business expense. Either way, the business itself isn't consuming it.
- oldsecondhand 5y ago
  > That's because a person can consume food, You can write off a business dinner as an expense. Upper management also gets company cars, company phones, with company paid plans that they often use for private purposes as well.
quickthrower2 5y ago
But if I invest in an Xbox then that’s capex, so I’d only be claiming the depreciation. Better than nothing though ;-). How do I do depreciation on a beer I’m investing in? Also first time I’ve heard hoi polloi since Thatcher era.

Havoc 5y ago

I invested in Starbucks. No not shares. Medium black. Haha For some things the word does make sense though. Exercise bike etc. Or tech where you learn something

xyzelement 5y ago

As a finance person and someone who grew up poor and economizes by default - I mainly agree. An investment is something that (has a shot of) paying you more than you paid for it. From that point of view, a house is a speculative investment (there's a chance it will go up but also may not) while a car is definitely not an investment (short of very crazy things happening, value declines very quickly with time.) So I agree with the author that saying something like "I invested in a bottle of booze because booze will make me happy" is an abuse of the term investment. However, now that I am a bit grown up and have a wife and kids, I look at the concept of investment in a broader sense. To me investment is anything that will give me/my family something important and less nebulous than happiness but not as concrete as money. For example, we just paid more for a house than we would have because it's walking distance to family. There may be some minor financial benefits to this but is not the point - we didn't do it to save gas money visiting them. But I see it as an investment of a sort. I care about my kid, and I think it's good for him to grow up seeing his cousins every day. I know my wife is very happy to be near family. So while it's not a financial investment, I do see it as an investment into my child and family and that feels kinda like a real thing.

MattGaiser 5y ago
> short of very crazy things happening A colleague of mine bought a relatively new car back in 2019 and resold it for the same price a few months back. So we are currently in the world where crazy happens.
- xyzelement 5y ago
  Agreed - we just bought a new car and it was out of the question to buy used because the prices were almost the same. But I think the point stands - your friend likely did not buy this car in 2019 planning to sell it for more so it's not an investment. (on the other hand, if he had anticipated covid and the chip shortage and bought cars expecting to sell them for more, that would be an investment - but that's not what people are doing)
speeder 5y ago
Car and crazy things: in Brazil during our last hyperinflation period, people literally bought cars as an investment, because often used car prices were just slightly behind a new car price, while other methods of investment had literally lower returns than that. A lot of people became car flippers too, bought used cars, repaired them, improved what could be improved, and sold them back, if done right sometimes for amounts that were ludicrously much more than they paid. Suffice to say, rampant inflation is NOT pretty.

djrobstep 5y ago

This is definitely a widespread phenomenon. I find this most grating when used in reference to poverty relief, eg "increasing unemployment benefits is a worthwhile investment". As if we can't raise simply raise welfare because preventing homelessness and starving children is the decent thing to do - it has to be justified as some kind of business case.

WalterBright 5y ago

kenrick95 5y ago

Need a "(2013)" in the post

dang 5y ago
Added. Thanks!

the__alchemist 5y ago

I wonder if this is why the price for used items is high enough that I buy new every time.

gkop 5y ago

> It’s become so mainstream to incorrectly use the word “invest” There are literally multiple definitions of “invest” in any dictionary. This essay is annoying.

mikewarot 5y ago

Good work boots are an investment, as are good tools, assuming you use them for decades. A house is a deteriorating pile of lumber that requires periodic maintenance and also incurs a lot of taxes. Anything else called an investment, or when I'm told what I deserve... is a big red flag.

BenoitEssiambre 5y ago

Note that technically this is wrong at least if you're talking economics. In economics, what defines investment vs consumption is that the consumption value is provided over time for investment instead of immediately for consumption: https://en.wikipedia.org/wiki/Investment_(macroeconomics) https://en.wikipedia.org/wiki/Investment_(macroeconomics) Investment doesn't imply positive returns. A squirrel hiding nuts in a cache to survive the winter is investing instead of consuming, even though some of these nuts will spoil or be stolen making the returns negative. Note that GDP equals consumption + investment (sometimes the government and export/import components are broken down in the equation).

yarky 5y ago
[inflation enters the chat] You can buy to consume today at a lower price than you likely will in the near future, assuming serious inflation on everything. So consuming today might be a good investment since you end up with a lower cost today for a product that you will buy soon anyway, the real return will depend on the realized inflation, which in some countries is not negligible.

btown 5y ago

There's a much deeper narrative here, which is that I feel there's an increased sentiment, across socioeconomic groups, that the investment with the greatest return is the so-called "hustle" - that unique opportunity, largely (so the myth goes) a function of your own motivation and not external factors, that will catapult you into wealth and status more vividly and transformatively than any annually-compounding index-tracking savings would do. However often people in other times were shown pictures of celebrity, never before have we been bombarded so much with "started from where you are, now I'm a founder/YouTuber/influencer/multi-level marketing maven" stories. And in that context, anything that "centers" you on being able to sustainably hustle is an investment in the hustle. The gaming you do to wind down at the end of the day, the fancy dinner or vacation that will motivate you to want more of that lifestyle - all of it is an "investment" in your own mental state, no different than a business investing in good lawyers or accountants that can help avoid distracting drama. And hey, if you're in a position to actually turn that energy into concrete results, that's perfectly logical! But it's not for everybody, and I do agree with the OP that companies are taking advantage of the positioning to encourage people to go into more and more debt. The influencer economy is certainly not a zero-sum game and there's certainly not a hard cap on how it can grow, but looking society-wide I worry that expectations are so far misaligned that things are going to come to a head.

vladmk 5y ago

This guy obviously doesn't know anything about the cost of an unopened Mario Bros game for the NES #investment

Stampo00 5y ago

In spite of the author's argument, this reads as linguistic prescriptivism to me. The meaning of words changes over time. If you endeavor to hold a grudge every time language evolves, you're going to end up a pretty grumpy person. So, try yeeting the prescritivism for a while, fam. See if you vibe with it.

emmett 5y ago

This is silly. An investment is an expenditure of resources today, which pays off down the line. Dinner at a restaurant? Not an investment (unless you believe in investing in memories, which I believe stretches the metaphor slightly). An Xbox? Sure that’s an investment that pays dividends in entertainment over time. It’s a pretty short term since it’ll be obsolete in 5-7 years. Investing in a house w a neighborhood you love? Assuming you stay and love it, absolutely an investment and a long term one — maybe pays off for the rest of your life! Not all returns pay out in cash. To think otherwise is to financialize your whole life, to know the value of money but nothing else.