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Passive expense – 9 things that lose value after purchase.

Passive expense refers to the hidden costs of goods and services that depreciate in value after the purchase. This post highlights nine such items that quickly lose value, including cars, homes, electronic appliances, furniture, and clothing. These items are necessary for daily life but can be a financial burden as they get older and require more maintenance and repairs. Aside from the tangible factors, there is also an opportunity cost associated with these items as their money could have been invested elsewhere. It is important to evaluate the purchase of such items in order to consider their long-term cost and make an informed decision.

Reselling old things that you no longer use can be a good source of small extra money. In fact, you will be very surprised to find out how much money some “vintage” things can bring if you try to sell them..

However, there are many items that begin to lose their value almost from the time of purchase. Financiers call it passive expense. In this regard, we decided to tell you about 9 examples of such acquisitions: from wedding dresses to video games.

Cars: lose about 11% in value in a minute after purchase

passive flow

Most people do not even realize that the car just purchased at the dealership, shiny and clean, depreciates already in the first minute after the acquisition. According to a Trusted Choice study, car prices have been reduced by an average of 11% since driving began. During the year, the price drops by 25%, and after five years the car is estimated at only 63% of the amount for which it was taken from the passenger compartment. That’s why buying a used car is a popular and smart solution..

Of course, the indicated percentages are not valid for all situations and depend on the manufacturer, model, mileage, prestige, and other parameters. But they reflect the overall picture of the industry. A car is that passive expense that people rate as an indicator of status. In fact, a car takes a ton of money and alas, it never pays for it. In other words, buying a vehicle is a bad investment. The exception applies only if you earn money using your transport.

According to the analytic agency autostat.ru, Russia is the least prone to devalue Hyundai Solaris, Mazda and Volvo. These cars save at least 85% of their value over three seasons..

Phones and smartphones: depreciate by 25% for 6-8 months of operation

passive flow

Due to the speed of technology development and their introduction into everyday life, smartphones and similar mobile devices lose more than half of their value in one year. A small study of Yandex.Market and sites with ads helped us identify that the new iPhone X 256 GB worth about 80,000 rubles when reselling loses up to 25% of its price.

This is a fairly large figure, but in fact the iPhone shows less annual loss than the products of HTC, LG and Samsung.

Wedding dress: even after wearing it once, you can hardly get back more than 50% of the resale value

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Do you want to – believe it or not – but there is a market for wedding dresses. Here, for example, is foreign site selling those. He offers everyone who plans to sell their wedding attire to use a calculator to find out the current price. The creator of the site, Josie Doug, told the Daily Mail in an interview that she recommends selling the dress for half the original price, if it is cleaned, in good condition and not older than 2 years.

Doug says that you can get a lot of money when reselling, if you wore a designer model from Vera Wang or another well-known manufacturer for the wedding. But even with this condition, this is a game that is difficult to win. For example, Baracchi’s Beyonce dress with crystal inlay, in which she was dressed in the video for the song Best Thing I Never Had, was put up on the mentioned site for only $ 30 thousand at an initial price of $ 85 thousand.

Video games: second-hand game stores buy them for a penny, and then sell them with a decent margin

passive flow

According to a Witch study on the aftermarket of video games, when reselling a used game, its actual value decreases by more than 70%. The author of the study paid about $ 60 for the new version of Call of Duty: Black Ops, and when trying to resell, he received an offer of only $ 22. Despite the fact that the experiment was conducted in 2010, this is relevant because video games remain a rapidly depreciating product..

Books: if you don’t have an impressive library, it’s unlikely that you can make a lot of money from reselling books

passive flow

A simple search demonstrates how quickly the cost of a particular book can decrease over time. The hardcover book “Everything I Didn’t Say” by Celeste Ing was released in September 2017 and sold at about 1,000 rubles per copy. Now at Ozon this edition is sold at 439 rubles per copy. This means that the cost of the book in eight months has decreased by almost 60%.

Thus, despite the ability to easily make money selling used books, it’s not possible to get rich.

Timeshare: despite the common misconception, it is not an investment and is gradually losing value

passive flow

Timeshare is the use of property by one of its owners in a certain period of time. This form of ownership is popular in the tourism industry of the USA, Israel, Thailand, Spain. But the practical application of this approach is problematic for a number of reasons. Timeshares can be considered as investments, but, according to Investopedia, but they lose value and do not generate income. That is, in fact, are not investments.

In addition, this form of ownership incurs losses, since it requires the payment of an annual commission. On average, in the United States it is $ 800 (according to the American Resorts Development Association).

And since the offer on the timeshare market far outweighs the demand, it is very difficult to sell such an asset. If you manage to do this, you will most likely receive much less than you paid. Secondary timeshares are usually sold for 30-50% of their initial cost..

Jewelry: a rare jeweler will offer a private person a good price for a used diamond

passive flow

Across the world, divorce statistics show large numbers, which means that many people have a reason to sell their diamond rings and other valuable jewelry. But, unfortunately, according to Diamond Pro, most jewelers receive diamonds for production not from individuals, but from wholesale suppliers. They are unlikely to want to buy a diamond from a private person, because this, in fact, would mean investing in a gem. The only option that will suit them is a purchase at a price significantly lower than the market.

In addition, it should be borne in mind that the initial retail price that you pay for gems and jewelry with them includes not only the net cost. It covers rental, marketing, employee salaries and other expenses of the enterprise..

Electronics (laptops, tablets, etc.): quickly becomes obsolete and loses value

passive flow

Another popular passive expense. Despite the fact that tech companies regularly release updates for their products, the general technical background is rapidly changing. So, DVD-players appeared in the 2000s. and were very popular. After 15 years, they were forgotten about them, exchanging for various streaming videos on the network. Suffice it to recall how often Apple offers new versions of the iPhone and iPad, and how much hype they release..

Due to such a frantic pace of change, your electronics quickly lose value every day after making a purchase. A MacBook Air with 128 GB of memory costs about 60,000 rubles, and a supported model on an ad site will cost you 25,000 rubles – a 60% drop in price.

Supported clothing: stores offer a low price, so it’s hard to make big profits

passive flow

Anyone who has ever tried to sell clothes to a used goods store knows that it is almost impossible to make a profit. In the US, this is because stores like Buffalo Exchange and apps like Poshmark charge a percentage of the things they sell for you..

And in Russia, even in Moscow, it is not very easy to find a store that accepts things from individuals, there are very few such offers. The best you can do is sell them on Avito.

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Comments: 3
  1. Waverly

    What are some examples of passive expenses? Can you provide a list of items that tend to lose their value after purchase?

    Reply
  2. Waverly

    What are the 9 things that lose value after purchase?

    Reply
  3. Avery Kelly

    What are the 9 things mentioned in the text that tend to lose value after purchase?

    Reply
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