The continuation of last week’s harrowing tale on assets, as told by Eddie, Financial Uproar’s new Thursday guy (with a little help from Nelson). He’s here every week now, probably until death. I do not screw around with contracts. 

Last week we talked about types of assets, differentiating between productive and non-productive. Essentially, productive assets pay you to own them (dividend stocks, investment real estate, etc.), while non-productive do end up going up in value but don’t pay you to own them (like stocks that don’t pay dividends, or that collection of sports memorabilia*).

What You Should Do

A simple way of expressing what a rational person should do can be illustrated in the table below:


Appreciating Depreciating
Productive Buy as many as possible Depends
Non-Productive Buy as a hobby Avoid or minimize

Remember, in the non-productive depreciating column we have such money sucks as cars, cell phones, boats, etc. Should they even be counted as assets? They cost you money every month to operate, and are usually declining in value as they do. It’s like saying a mortgage is a forced savings plan. You have to pay interest in order to save? Sounds crappy to me. They’re assets, but they’re also the worst assets ever. That’s like inventing Coca-Cola so you could replace your morphine addiction with a cocaine addiction. That is 100% true, by the way.

How about buying productive depreciating assets? Last week Eddie identified those as:

  • Certain real estate rentals
  • Poorly ran businesses
  • Stocks going down in value
  • GICs
  • Equipment needed to run a business

This is when it gets much more interesting. Any moron knows you should buy things that go up in value or pay you to own them. But what about a struggling business? Or, as we tend to talk about a lot around here, struggling stocks?

Most of these lie under the “it depends” category. I obviously think there are all sorts of struggling businesses out there that deserve some of your cash. And I took most of the capital from selling my house and put it in a GIC, because I want it to be there when the time comes for me to buy another house. Protection of capital is the important part, not the return.

And most of the time, equipment to run a business is a no-brainer. Assuming, of course, the business owner hasn’t just convinced themselves that it’s something they need.

These are the types of assets that get overlooked by the rest of the investing world. They are worth your time.


The examples given above can be dissected and subdivided across the four types of assets. They are meant to merely illustrate the point rather than be an all-encompassing and flawless categorization of reality.

Secondly, it is worth mentioning two other important ways to allocate capital or spend money. The first concerns vacations and experiences, such as an all-inclusive trip to Mexico or backpacking throughout Europe. While they are not income producing or appreciating, it may appear that they are a waste of time and not worth undertaking. However, leisure, in moderation, is incredibly important so a person can be productive when they are at work. Most importantly, investing in your own human capital whether that be through formal or informal education, is likely the wisest investment a person can make. Just don’t get an arts degree.


This is not a revolutionary idea within the realm of economics and finance. This concept is discussed at length by Robert Kiyosaki in his book, Rich Dad Poor Dad. Many personal finance writers have written about it as well. However, their logic fails when the issue of debt is introduced into the equation, but that is for another day. Plus, many people forget this simple way of framing an expenditure when formulating their life strategy, negotiating a deal, or completing a transaction at the till.

*You only wish, but it’s cool so I’ll allow it.


Tell everyone, yo!