Many of us consider our home as an investment. But think again.
Is your home really an investment?
Here we are assuming that you have only one property with you which you have termed as an investment. Also this question arises from the fact that an investment cannot be a compromise. The very purpose of making an investment is to earn profits.
When an investment is done you expect good profits from it and if at the time of profit booking you are left with a thinner profit margin, then would you still call that an good investment? Probably you would not call such an investment a true or real investment.
This scenario arises when you have a single property with you in which you live. Then according to me your home is not your investment. How? I am going to answer this. And again the same situation arises when you buy jewelry. Your jewelry is also not your investment. We would also elaborate on this aspect so that you have a clear understanding on it.
Now we would take this further from here and show you why we are emphasizing that a home is not an investment. Let us take an example to make it clear to you. Suppose that you have a property in which you presently live and like many others you too consider this as a investment.
Your home is for your living. If this is an investment then if it is giving you good return will you sell your home? Probably not because if you sell your house in which you are living where will you go. You have to buy another house.
Actually when you sell your property, you do get its value but you are not able to save or reinvest the gains in totality. First you have to look for a new house to live and that comes at a cost. If you buy a house of the same standard then its cost would be somewhat equivalent to your original house that you had sold.
So what you had gained you have to pay to buy a new house for yourself. So where are the returns and gains? The actual margin of gains is nearly nil. And if you decide to compromise on your present living standard then too you have to part away a value of the gains that you had made by selling your house.
So in reality your home is not your investment. It would have been an investment if you had at-least two properties with you. The second house can be rightly called as a true investment for you. If you sell this house the sale proceeds can be saved or reinvested in totality not with only one property. Investment cannot be a compromise ever.
The same scenario arises with your jewelry. Have you bought jewelry to make profit? If you have not bought jewelry to make profit then how it can be treated as investment?
Normally jewelry is purchased for yourself or your loved ones. Jewelry is something very personal and means a lot to most of us. Parting it for the sake of money is not liked at all.
If you buying jewelry by selling your previous jewelry then too it would come at a higher cost at the rates prevailing at that time. And even if you reinvest the jewelry sale proceeds then too you had lost your precious and treasured jewelry forever. So again selling jewelry is a compromise and hence is not a correct form of investment.
Thus we can now understand that your home and jewelry is not your investment. If you have understood this aspect then you would take to other forms of investment to make profits. Rather you would aim of securing a second property for yourself. Then that property can be called as an investment but not your only home in which you are living.