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Catching Rae

Are you "Investing" or "Spending"?

Photo by Peter Macdiarmid/Getty Images News / Getty Images

Photo by Peter Macdiarmid/Getty Images News / Getty Images

Let's talk about the importance of language for a moment, because every retailer seems to be telling us to "invest" in XYZ for the coming year - but investing has clearly become a twisted euphemism for "spending a lot." 

"Investing" sounds so grown-up and responsible - it's something one does in a bank while wearing a suit, for crying out loud. But what are you really promising yourself when you buy an item - especially an item of clothing - as an investment?

From merriam-webster.com:

investment
noun  in·vest·ment 
Definition of investment
  1. :  the outlay of money usually for income or profit :  capital outlay; also :  the sum invested or the property purchased

The thing that distinguishes this word from other words is that it connotes spending with intent to gain profitable returns. The intent to profit is what differentiates an "asset" from a "liability." 

From richdad.com:

The simple definition of an asset is something that puts money in your pocket. This is accomplished through four different categories, one of which is real estate. When I say real estate, I don’t mean your personal residence, which is a liability. What I mean is investment real estate, which is a great investment because it puts money in your pocket each month in the form of rent.
There are three other primary assets: business, paper, and commodities. If you are an entrepreneur or a business owner, your business is an asset. Paper assets are stocks, bonds, mutual funds, and so on. Finally, commodities include gold, and other resources like oil and gas, and so on.

Yes, we're talking about cash money here, not an abstract "profit" of sartorial joy. You can see how most wardrobe purchases would be liabilities just like a personal residence - they don't put money in your pocket and, in fact, continuously cost money to maintain through cleaning, repairs, et al. Most clothing also rapidly depreciates and cannot be sold for a profit after you have used it. 

So what does it really mean to invest in your wardrobe? Is it utterly pointless and a waste of time? No. 

There are certain times when being sharply-dressed definitely works to your advantage and indirectly ups your net worth:

  • Great business suit > job offer > profits
  • Attractive professional image > clients > profits
  • Comfortable/functional work wardrobe > productivity > profits
  • Versatility > decreased spending on other clothes > profits
  • Function (e.g. warmth, mobility, baby-chasing) > decreased spending on services (e.g. heat, transport, daycare)> profits

Unfortunately, this means that most wardrobe purchases ARE NOT INVESTMENTS; they're just purchases. You aren't investing; you're just spending. 

Fortunately, similar to a personal residence, there are plenty of great reasons to spend on your wardrobe aside from investing. A residence provides you with a place to live, a sense of accomplishment, and walls you can paint any silly color that tickles your fancy. Your wardrobe helps you express your identity and your mood. It allows you access to restaurants, gyms, 7-Elevens, and all your favorite haunts. It communicates important information about your deadly ninja skills to that mugger in the dark alley...

There is nothing wrong with paying for a service or product, but when dealing with your closet it is important to root yourself in reality. Don't delude yourself into looking at everything as an investment - or you might not have enough budget left to actually invest when the opportunity/need arises. 

Rachel KlewickiComment