The idea that your assets cost you money is counter-intuitive because assets are specifically designed to increase your wealth, or at least your cachet—that’s why you invested in them in the first place. An asset is only an asset if you take care of it correctly, nurture it, and work to either maintain or improve it. In short, your assets are only worth as much as they give you, as much as you use them, and as much as you take care of them; otherwise, you may inadvertently decrease their value and undermine their worth.
Your Home Can Cost You
Owning a home is a dream for many people across the country. Once you finally close the deal and receive the keys, it feels like that dream has officially come true. Homeownership is incredible, but the fantasies about equity and long-term assets can often cloud the reality of the situation. Mortgage payments come as a shock and sometimes make it difficult to keep your head above water when it comes to paying your other bills.
More importantly, your home is only an asset if you maintain it. In addition to keeping up with routine home repairs, you can’t forget about general upkeep, including landscaping and exterior home improvements. A grand house isn’t much of an asset if it has sagging gutters and peeling paint.
Your Car’s on the Decline
Even if your vehicle is brand new, right off the lot, the latest and greatest luxury model, it already costs you. The second you drive away from the dealer, its value is on the decline. In fact, when you include the cost of gas, regular maintenance, and insurance with your monthly car payment, you’re losing money. It’s even worse if you own a car that requires expensive parts or unique skills and knowledge to fix it.
Is Your Cell Phone a Money-Sucker?
It happens to everyone. Whatever your favorite brand, you are thrilled at the news of the upcoming model. You save up your money, you preorder, maybe you even wait in line so you’re among the first to get your hands on the newest device. However, that phone you love so much can cost you more than it’s worth, as well.
The key is to invest in a high-quality, well-reviewed phone that has everything you want, such as the Galaxy S7 Edge. Compare and contrast different models and brands to find what fits best. Are there particular apps you need to have? Are there certain features you can’t live without? Don’t buy a device you don’t like if your phone is important to you or essential to your daily life. It’s OK to make the investment as long as you’re smart about it.
Once you pick your phone, then your job is to make sure that your carrier gives you everything you need. You don’t want surprise fees or expensive data plans. You don’t want to pay extra to use what you already bought.
Your Investments Aren’t the Best Investments
It’s possible that even your stakes negatively impact your finances. That sounds completely illogical, but it all comes down to the investments you make. Pick the wrong ventures, and money loss is practically a guarantee. Avoid low-risk bait, especially if there’s even a chance that inflation will ultimately surge past them. Stick to investments that promise to grow more valuable over the life of your investment. If you play the stocks, steer clear of gimmicks and trends. Research the history of the stocks that interest you.
Where and how you keep your investments are critical considerations, as well. Do you own property that you can rent? It’s only an asset if it doesn’t cost more than you make. Does the institution holding your investment charge you exorbitant amounts of commissions and fees? Do you pay an accountant, broker, or money manager? Unless your investments cover those expenses, they cost you.
It’s possible to turn it around with all of these assets. Just do everything possible to ensure they maintain their value rather than drain your bank account.