Face It, You're Spending, Not Investing
I am a little cranky today. But then again, I'm almost always a little cranky.
This, I hastily add, is entirely justified. If you write about personal finance, you are exposed to a steady stream of irritating nonsense, as brokers tout the virtues of rotten investments, Wall Street strategists pretend they're clairvoyant and ordinary investors struggle to justify their financial foolishness.
Which brings me to today's complaint. Why do so many folks claim they are making an investment -- when all they're really doing is spending money?
Getting Real
Trust me, this happens all the time. A jewelry store near my home has shopping bags stamped with the words "Beautiful Investments!"
A few years ago, I got a flier for lawn fertilizer, which noted that "a survey of real-estate agents indicates that a well-maintained lawn adds an average of $3,600 to the resale value of a $90,000 home."
Meanwhile, during the Beanie Babies frenzy, my kids were advised that, if they removed the manufacturer's tags, their stuffed animals would no longer be considered "investment grade."
Come on, folks, let's be realistic. Jewelry, fertilizer and Beanie Babies are not investments. Yes, your lush green lawn may add slightly to your home's value and, yes, your jewelry may someday be worth more than you paid. But, in your heart of hearts, you know these aren't truly investments.
How do you know? It comes down to a simple litmus test: If you hand over a wad of money and get a lot of pleasure in return, you are probably spending money, not investing it.
That said, you can analyze any expenditure in the same way you analyze a stock. With a stock, your total return consists of a mix of capital gains and dividends.
Similarly, with jewelry, fertilizer and Beanie Babies, you also get a mix of capital gains and dividends. Problem is, the capital gain is usually a capital loss, and the dividend isn't of the cash variety.
Rather, the dividend consists of the pleasure you get from having a green lawn, cuddling up in bed with your stuffed animals and flashing your diamond ring at the neighborhood cocktail party.
In other words, if you spend your money wisely, you will collect huge dividends. But don't kid yourself: These aren't the sort of dividends that will pay for your retirement.
Collecting Rent
When it comes to confusing spending with investing, nothing can match the muddled thinking that surrounds real estate. In fairness, however, this isn't entirely surprising.
To understand why, imagine you bought two homes, one for your own use and one that you rented out. The rental property, I would argue, can be considered a pure investment.
Like a stock, you will get both capital gains, thanks to the home's price appreciation, and dividends, in the form of monthly rent checks. If you added up your rent and price appreciation and then subtracted homeowner's insurance, maintenance expenses, mortgage payments, taxes and other costs, you would have your profit. Often, this profit can be pretty darn impressive.
By contrast, there's no way the house you bought for your own use can be considered purely an investment. True, you should enjoy some home-price appreciation. But despite today's infatuation with home prices, this probably won't make you wildly rich.
According to home-finance corporation Freddie Mac, U.S. home prices have climbed an average 6% a year over the past 30 years, compared with a 4.4% inflation rate. Moreover, home-price appreciation is often largely or entirely wiped out by the hefty costs of homeownership.
Meanwhile, because you are using the place yourself, you won't collect any rent. That's a big deal. The reason: If you are a landlord, rental income is typically your biggest source of profit, dwarfing the gain from price appreciation.
On the other hand, you do have to live somewhere. Shelter is a necessity. Buying a home and effectively renting it to yourself hardly seems like frivolous, discretionary spending.
So if you live in your own home, are you investing or are you spending? I would argue it's a little bit of both. Most of us own homes that provide more than just basic shelter, so there is indeed a large element of consumption.
The implication: If you trade up to a bigger home or buy a vacation property for your own use, these purchases probably won't turn out to be great investments, because you're buying extra space -- and then consuming all of the potential rental income yourself.
Taking a Break
The costs of homeownership don't end with mortgage payments and maintenance expenses. Homeowners will often remodel the bathroom or put in a new kitchen, and then claim these expenditures are investments.
Sure enough, the projects pay impressive dividends, by bringing immense pleasure to the homeowners involved. But if these folks are hoping for hard cash, they will probably be disappointed.
The reality is, when homeowners go to sell, they rarely recover the full cost of their home improvements. In fact, the longer they wait to sell, the shabbier their home improvements will look -- and the less they are likely to recoup.
Today's confidence that buying homes and fixing them up is a great investment has fed the current mortgage-borrowing binge. We feel a whole lot better about spending borrowed money if the spending can somehow be considered an investment.
Some families take this financial self-deception even further, figuring there's nothing wrong with borrowing against the value of their home, so long as their increased borrowing doesn't exceed their home's price appreciation.
Mortgage lenders are apparently more than happy to play along. Indeed, at the end of July, I got a statement for my home-equity line of credit from PNC Bank. I don't owe any money on the credit line. But PNC clearly thinks that I should.
On my July statement, under the heading "Important Information," I got the following message: "Need a break this summer? Let your house treat you to a vacation. Simply use your line of credit to pay for your dream get-away."
And with that, I got just a little bit crankier.
这是花钱，不是投资
今天我有点儿生气。不过话说回来，我差不多总是这样。
我要马上补充的是，这种情绪是完全情有可原的。如果你撰写个人理财专栏，你整天就会面对一些惹人生气的无稽之谈：经纪商把糟透了的投资说得天花乱坠，华尔街的策略师装出一副很有洞察力的模样，普通的投资者则努力为他们愚蠢的财务决定开释。
这让我不禁问道：为什么有这么多人实际上只是在花钱，却声称自己是在投资呢？
面对现实
相信我，这种事一直都有。我家附近的一家珠宝店的购物袋上就印有“美丽的投资！”这样的字眼。
几年前，我看到一份草坪肥料的广告传单，上面写著：对房地产经纪人的调查显示，保养良好的草坪可以为一所转售价格为9万美元的宅邸平均带来3,600美元的增值。
与此同时，在Beanie Babies热潮期间，我的孩子们被告知，如果他们取下制造商的标签，他们的填充动物玩具就不再被认为是“投资级”的了。
嘿，老兄，现实点行吗？珠宝、肥料和Beanie Babies可不是什么投资。是的，你那葱翠的草坪也许可能使你的房子略有增值，是的，你的珠宝或许有一天也会增值。但是，在内心深处，你深知这些并非真正的投资。
你怎么知道呢？其实一个简单的测试就能让事情一目了然了：如果你花出去很多钱，得到的是很多乐趣，那你很可能是在花钱，而不是在投资。
你可以像分析股票那样分析任何开销。就股票而言，你的总回报包括资本利得和股息。
相似地，对于珠宝、肥料和Beanie Babies，你也可以获得资本利得和股息的回报。问题是，这里的资本利得通常是个负数，股息不是以现金形式派发的。
相反，股息是由你的快乐构成，你的快乐来自于拥有那片绿草坪，搂著怀里的填充动物玩具酣睡，在鸡尾酒会上炫耀闪闪发光的钻石戒指。
换言之，如果你花钱精明，就会获得丰厚的股息。但还是别欺骗自己：这些可不是那种可以负担你退休生活的股息。
收租
在谈到把花钱和投资混为一谈的时候，没有什么比得上与房地产有关的话题。不过，公平来说，这并不完全出人意料。
为什么？首先，假设你购置了两处房产，一处自住，一处出租。我认为，出租的房产可以看作是一项纯粹的投资。
像股票一样，考虑房产的升值，你可以获得资本利得，你还可以获得股息，也就是月租收入。把租金收入和房产升值加起来，然后减掉业主的保险、维护费用、抵押贷款、税项和其他成本，余额就是你的利润。通常，这笔利润可能相当可观。
相反，你购置用来自住的房产绝不能被认为是纯粹的投资。的确，你应当能够获得一些升值。不过，尽管如今的房价炙手可热，也不会令你一夜暴富。
根据住房融资公司Freddie Mac的资料，过去30年来，美国的房价平均每年上涨6%，而通货膨胀率为4.4%。此外，房产升值的部分通常基本上、或完全被所有者投入的大量成本所抹煞怡尽。
与此同时，因为你购置的房产是用来自住，你不会收到任何租金。这很重要。理由是：如果你是房东，租金收入通常就是你最大的利润来源，超过了房产的升值。
另一方面，你确实得有个住的地方。住所是必需品。购置一处房产，然后实际上把它租给自己，似乎谈不上是轻率的随意支出。
那么，如果你住在自己的房子里，你到底是在投资还是在消费呢？我认为，两者兼而有之。我们中的大多数人拥有的房产可不仅仅是基本的庇护所，因此，确实有很大的消费成分。
言下之意是：如果你想换一所大一点的房子、或者买一处度假别墅，留作自用，这些购置很可能不会成为好的投资，因为你要买额外的空间－－然后自己消耗掉所有的潜在租金收入。
贷款
房屋所有权的成本不只限于抵押贷款和维护费用。房主通常都会修缮卫生间，或者打造新厨房，然后声称这些开支都是投资。
当然，这些项目通过给房主带来巨大的快乐，也算支付了可观的股息。但如果这些人想要的是实实在在的现金，他们可能会感到失望。
现实是，当房主出售房屋的时候，他们很少能收回全部的家居装修成本。实际上，他们等待出售的时间越长，家居装饰看起来就越破旧－－而收回成本的可能性就越少。
今天人们将购置房产、装修房屋作为优良投资的信心已经助长了抵押贷款的热潮。如果这些支出在某种意义上可以被看作投资，我们在花借来的钱时感觉会更好。
这是一种财务上的自我欺骗，可是一些家庭却越走越远，认为只要增加的借款不超过房产的升值，多借点钱没什么错。
抵押贷款商自然乐意奉陪。7月底的时候，我就收到PNC Bank寄来的物业套现贷款额度报表。我可没在这上头借一分钱。但PNC显然认为我应该借点。
在我7月份的报表上，在“重要资料”的标题下，我看到了以下信息：“这个夏天想去度假吗？让你的房子来招待你吧。只要使用你的信贷额度，就可以实现你的美梦。”
看到这里，我更生气了。
