Like most of us, I have made some really good investments and some really bad investments.
Purchasing shares of a mutual fund for my retirement account—good investment.
Spending hundreds of dollars souping up my high school car that I would no longer have by graduation day—bad investment.
We all have our investment successes and failure. Hopefully, we learn from both and try to repeat the successes while avoiding the failures.
God has made us stewards of His resources. So it is important to be thoughtful in the ways we invest the money He has given us. We should try to chase the good and steer clear of the bad.
So let me provide a few investments to avoid. Here are four terrible investments for your money:
- New cars. You purchase cars for travel and, sometimes, fun. But you should never view your car as an investment. Why? It’s almost certain to lose money. Cars depreciate, or lose money, over time. This is especially true with new cars. If you purchase a new car, you can assume that 10% or more of the car’s value is gone as soon as you leave the car lot.
- Timeshares. Most timeshares are located in vacation areas. With timeshares, you purchase the rights to use a particular property during the year. If you buy a timeshare from a developer, rarely will you be able to resale the timeshare for the amount purchased. You will almost always lose money. In addition to this, you have to pay ongoing fees for the timeshare. If you are not able to stay there during the year, you just wasted a lot of money.
- Collectibles. Beanie Babies. Cabbage Patch Kids. Happy Meal toys. Precious Moments. Admittedly, I am not a big collector in general. I don’t like clutter. But there is nothing wrong with collecting items because they have personal value to you. Just don’t use collectibles as an investment. History has shown us over and over and over again, that collectibles are terrible investments.
- An investment you don’t understand. It is easy to get sucked in to purchasing an investment because a coworker is bragging about how much money they made from it. But be careful. If you don’t understand how the investment works or how to generate a return from the investment, stay away. Not understanding an investment is a clear sign you need to avoid that investment.
To be good stewards, we must be wise investors. Before you invest your money, do a good amount of research. This won’t guarantee success, but it certainly can help you avoid spending your life savings on Beanie Babies.
Written by Art Rainer, member of the Summit Stewardship and Generosity Ministry Leadership Team.
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