Friday, August 04, 2017

Consume, Buy or Invest

Consuming, buying, and investing are three different things. If I buy a doughnut and eat it, it is gone. Consuming. If I buy a ring, I get to keep it, but in a few years time, it will still be a ring. Buying. If I invest in a business, it will make and sell things, or do something. That something will hopefully generate a profit that can then be reinvested (or consumed, or used to buy things). Investing. In a few years, that investment will either be bigger, or will have generated the money to consume, buy things, or invest in other things. Rich people in the past bought a lot of things, and consumed a lot of things. Rich people today invest.

Warren Buffett has famously simple tastes
He prefers to invest his money than spend, or buy things
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