Originally published at: This is how much money you’d have if you bought $AMZN stock instead of Amazon Prime – Personal Finance Club
Before you come at me, this exact comparison isn’t exactly fair for a couple reasons.
1. Amazon Prime provides utility (free/faster shipping, streaming video, etc) where as stock provides no utility
2. I’m cherry picking one of the best performing stocks in history over a time period where it did extremely well
That said, the general lesson still applies. When you pay for stuff that has ongoing costs or loses value (like a subscription service) you’re going to lose money. When you buy stuff that provides income or goes up in value (like stocks), you’re gonna make money.
The lesson here isn’t to never spend money or never enjoy yourself, but be conscious of the distinction between assets and liabilities. If you make $500K/year and buy $500K worth of liabilities, you’re broke. If you pick a percent of your income to devote to assets, you’ll build wealth and be rich over time!
My favorite assets are index funds and investment real estate! They provide income (dividends and rental income) and go up in value over time!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
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