We’re All Investors Now

In the past decade or so I’ve noticed more and more people referring to their discretionary consumer purchases as “investments”. “I decided to invest in a new couch.” “My newest investment is an xbox one.” “I thought it would be wise to invest in a new shower curtain.”

I’ll see it in advertisements too. I suspect that’s where it all started, at some marketing meeting, “Hey, if we convince people they’re ‘investing’ in their future happiness, rather than just blowing cash on something they really don’t need, maybe they’ll feel better about giving us their money?”  “Brilliant!”

So now you don’t buy a car anymore. You invest in one. Your dust-collecting gadgets aren’t signs of impulse purchases for which you should feel guilty, they were just bad investments that didn’t pan out. It happens to the best of investors, right?

If you’ve thought through a purchase and decided you want something then good for you. Go get it. But don’t lie to yourself by calling it an investment. I mean, what exactly is the ROI of a video game console? What’s its dividend rate? Or are you hoping for a future capital gain?

An investment is when a resource is expended in order to gain profitable returns, as interest, income, or appreciation in value. Being able to spend your free time over the next year playing video games is not a profit.

When I’ve confronted people about this in conversation they’ll tell me that they use the word because they are “investing” in their future happiness. So their ROI is their happiness. So now anytime you spend money on absolutely anything it’s an investment. Which renders the word “investment” completely indistinguishable from the word “purchase”.

I just wish people would see that this all started through advertisers choosing a word that creates a feeling of greater self-satisfaction when buying things. So that in the future you’re more likely to buy more things. And by buying into it, and actually using these words incorrectly yourself you’ve completely fallen for it. Now, not only are you allowing advertisers to manipulate you by using incorrect words to make you feel better, you’ve allowed them to trick you into manipulating yourself by internalizing the language and using it in everyday conversation.

It’s become so mainstream to incorrectly use the word “invest” in this way that I hardly even bother confronting it any more.

Well, screw it, if you can’t beat ‘em, join ‘em. I’m gonna go invest in some groceries and a utility bill. Hey! I do feel better…

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  1. Michael Crosby
    Posted December 15, 2013 at 1:29 am | Permalink

    When I first noticed it was in political speech.

    • Posted January 28, 2014 at 2:13 pm | Permalink

      I agree – this is the first time I noticed it as well. Rather than say “spend” in relation to government activities – it’s an “investment”. I’ve even used it to convince the higher-ups at work when pitching a project. It’s effective – though a dangerous way of thinking.

  2. Drew Reyna
    Posted December 15, 2013 at 8:20 pm | Permalink

    How about….”Treat yourself”?

  3. Posted December 16, 2013 at 12:35 am | Permalink

    I love the insight into our vernacular. The same thing has been done with the word “save” (which now seems to mean “spend less but still spending”, rather than actually putting money away instead of spending it).

  4. Posted December 17, 2013 at 9:14 am | Permalink

    Ha! It is cold now so I have been throwing my money into the whiskey market. It kind of sounds like rational choice theory.

  5. otto
    Posted December 17, 2013 at 10:13 am | Permalink

    Would be interesting to go back and see when and in what context this (and other) word perversion first occurred.
    @MC do you recall when / where you heard the political speech you refer to?

  6. Jason
    Posted December 19, 2013 at 11:55 pm | Permalink

    I really don’t have a problem with this usage of the word. Investing is the act of putting something at risk for a future gain. I invest my time in many projects for non monetary rewards. I think the issue you are having is a disconnect of values between the speaker and yourself. Just because you and I have rejected the rewards of a consumer based life style as shallow, doesn’t mean others can’t find value in these actions. You may understand that a shower curtain investment is a complete loss for you, but when someone says this to me, I simply acknowledge their differing values and recognize they are telling me they feel they took a justified risk and hope to benift from doing so.

  7. Posted December 20, 2013 at 4:31 pm | Permalink

    I recall hearing a woman at work over 25 years ago saying that she finally decided to “invest” in a new car. It sounded so odd to me back then, as it was the first time I had heard a vehicle purchase referred to as an investment. I couldn’t resist addressing her remark by drawing her attention to the fact that putting money into a depreciating piece of machinery is not an investment. I explained to her that this car will continue to COST her money over time, not make her money. Therefore, it was not an investment, but a purchase that ultimately made her poorer. She just wrote me off as a killjoy and an asshole. Nobody else in the office seemed to get what I was saying either. I believe that situation is a microcosm for society at large. Perhaps that’s why I am a multimillionaire today and most of those simpletons are not. Earning a modest salary for the past 30 years, I’ve regularly invested in basic financial assets. I own a 15 year old car. And yet, somehow, I’m reasonably happy.

  8. J
    Posted December 26, 2013 at 5:42 pm | Permalink

    The twisting of words in advertising is nothing new, but, since I try my best not to pay attention to advertising, I never thought about the word “investing” being used inappropriately. But you’re right, these are purchase, not investments. You missed one important reason that purchases could be considered investments: if they lower expenses. My wife is a crafter and invested ~$150 in a cutting machine called that uses to design and build all sorts of stuff. Holiday cards that cost$3.00 each, she can now make for ~$0.05 each…I haven’t calculated how much she’s saved over the course of the last year, but as the years go by, the ROI will be pretty damn significant!

  9. Posted December 28, 2013 at 10:41 am | Permalink

    Hmm, personally, I feel there is “some” truth to this perception of investment. SOME… In an odd way. For example, in the traditional sense of investment, one expects a financial return. But let’s look it it another way. For example. I take a holiday to relax my mind to keep me sane enough to work another year. Otherwise, I’ll go mad and get depressed and quit my job.
    There’s some strange logic to this I presume. But by going for the vacation, I get into a better state of mind AND am able to continue to work happily for another year, earning and saving another few grand. Which would be more than the cost of the vacation.
    If I put that to a new treadmill, it’s somewhat similar. If I actually use it and lose weight and get healthier and NOT have to visit the doctor, I could potentially save more than if I would have spent in medical bills, which would probably have occurred if I continued eating the way I did without exercising and losing weight, etc.
    Yes… this may be a long shot and possibly weird logic but personally, I feel that sometimes the term investment… might be relatively ok. Considering that the alternative is actually financially worse off.

  10. Posted January 19, 2014 at 8:55 pm | Permalink

    I think your analysis is spot on. I am okay with spending a limited amount of money on frivolous things but I will not allow myself to rationalize these purchases as “investments”. I have to call a thing what it is. Great post!

  11. @freepursue
    Posted January 21, 2014 at 10:30 am | Permalink

    My first LOL moment this morning.

    Did it all start with a home being an “investment”? From a large asset to now applying to smaller and smaller purchases? First a home*, then a car (8-year loan anyone), maybe a cottage or a time share, then an off road toy, then…[insert additional vice here].

    Anything that does not result in net positive passive income is not an investment. It is either a depreciating asset or a hobby. Pick your ditch…it’s still a ditch.

    Thanks for the post. I enjoyed reading it.

    *May be considered an investment if it appreciates, which is not assured. Maintenance costs can also be substantial. Yes, I am a home owner, but I consider it an expensive asset and find it ridiculous when people “trade up”.

  12. Rich
    Posted February 18, 2014 at 10:49 am | Permalink

    Just commenting to say I continue to enjoy your posts and am looking forward to the next update! Over two months since this last one… Hopefully that means you’re too busy enjoying life to be bothered to write anything here. :)

  13. Posted March 2, 2014 at 11:22 am | Permalink

    Eagerly awaiting your next post! I really enjoy your perspective on life and finances.