Buy a house!

From a friend, Lim Cheng Teik, who is deep into private investments. An admirer of Warren Buffet's style. He wrote this on his facebook, which I found to be very interesting and thought-provoking:

Want to impress people? Get a big house instead of a big car!

A RM 200k house, bought 10 years ago, would be worth at least RM 200k, and most probably it’s worth way more than that.

On the other hand, a RM 200k car bought 10 years ago, would most probably be worth RM 100k or lesser, perhaps way lesser.

Both house and car can show off or use the asset (unlike stocks, which u don’t get to use or show off to people). But one appreciates, and the other depreciates. Over long term, the difference between these 2 is huge.

Then again, I’m never a fan of “big” car. To me, a car is just a vehicle for me to take me from one point to the other. Safety is important. But buying expensive cars just to show off…. Well, let’s just say I prefer to show off big house or big investments than to show off big cars. 

People with rich person’s mindset enjoys owning assets that appreciates. On the other hand, people with middle-class or poor person’s mindset… enjoys owning assets that depreciates. 

To me, I think a good ratio of House value to Car value is 10 to 1 or higher. Meaning, if you wanna drive a Mercedes worth RM 400k, then get a RM 4 mil house first. 

I know of people who drive a big car, but they’re living in a small apartment. Really got the Car/ House upside down in “showing off”. Till today, he’s still struggling financially.

I personally think car is one of the worst assets, as that’s one big asset that u buy that depreciates so much in %, and if you’re buying a big car… the depreciation in amount is perhaps, the biggest in your expense