Buy Assets, Lease Liabilities
What you need to know before buying your next car
What if there was another way to buying a car? What if it didn’t involve ‘buying’ a car at all?
I just came across a quote by J.Paul Getty: “If it appreciates, buy it. If it depreciates, lease it.”
But what does this mean, and how does this apply when it comes to acquiring your next car?
An asset is anything that appreciates in value and/or provides an income e.g. property.
A liability is anything that depreciates in value and/or takes money from you e.g. cars.
Rather than spending money to buy a liability, use that money to buy an asset instead.
Then, use the income generated from that asset to lease/rent your liability instead.
In this article, I talk about the traditional way of buying cars, and why it may not be the best.
I then talk about alternative ways that you can procure a vehicle or any liability using assets.
Finally, I share my thoughts on this and whether it is worth going through all this effort.
