Some money moves might sound like good investments at first, before you realize they’re actually just great ways to part with thousands of dollars and have nothing to show for it. If you’re looking to invest your money, avoid these money mistakes like the plague. Here are three bad money moves that are absolutely not investments.
Buying a New Car
Sometimes you’ll see car dealerships using language like “investing in your image” by buying a new car. It’s very much worth noting that purchasing a new car is, in fact, the opposite of an investment. The moment you buy a car and drive it off the lot, it loses a considerable amount of value. Roughly half of the car’s value falls off in the first three years, leaving you with little to show for what you spent on the vehicle.
As such, you should never buy a car with the expectation that you’ll sell it later for anything close to what you paid for it. This is why financially advisors encourage most people to purchase used cars, as they are considerably more affordable than new cars.
Buying a Time Share
If you’re in the market for losing a lot of money on a very bad deal, you should check out time shares. A time share is essentially an agreement you enter into with a property owner that allows you to stay at a property for a specific subset of time, often a week or two at a stretch, on preset weeks. Suffice it to say, this is a bad idea.
Time shares often have clauses that make it difficult to break the agreement and stop paying for the access to the property. In fact, they are so frustrating to undo that there is an entire industry of time share attorneys who help people get out from their time share agreements.
Trading cards, collectible figurines, rare video games and the like can all sound like great investments if you hear some hobbyists tell it. However, this isn’t actually the case. They’re far from good investments: they’re volatile, low-cost, low-reward items that are very difficult to leverage into profit.
Not to mention, scalping them by buying them in huge numbers and preventing hobbyists who enjoy them from getting access to their favorite things is a bad thing to do. Avoid the trading cards and figurines and just invest in the stock market. It’s less volatile and it can make you a lot more money, a lot more consistently.