A house or college education falls into this category. Cars, clothes, and stereo systems don t qualify. Will Rogers once put it this way, Buy land, cause they ain t makin any more of it. The other mechanism is by putting the power of compounding interest to work for you, rather than against you. Let s look at the example of buying a car.
Cars depreciate in value through time.
They are also relatively expensive, so the buyer typically has to borrow money to purchase one. This means the buyer is paying interest on an asset that is depreciating the double whammy. By saving first, she has created personal wealth. She has sacrificed a short term want so that she could continue her monthly support of a foreign missions student while fulfilling her lifelong goal of owning a home. Both Shirley and Anita got what they wanted, but one has something eternal to go along with it.