Experience vs. passion assets

Investment is what you do with your savings. Spending is what you do to maintain current lifestyle. Then, there is discretionary spending, including spending on experiences and material goods. Here, we see why discretionary spending on some material goods can be just as rewarding as spending on experiences.

Experience vs. passion assets

You can take a trip to the Antarctic or enjoy a portside cabin on a Caribbean cruise. Those are experiences you are likely to relive when you share them with friends who made similar trips. Buying material goods, it is argued, is different. After a while, you get used to owning the product. So, happiness from acquiring a luxury watch, for instance may not last for long. Indeed, money spent on material good, it seems, cannot buy you happiness. At least, not as much compared with spending on experiences. But that argument does not hold for passion assets. When comparing memorable experiences with material goods, you ought to look at rare products not at some high-end luxury products.

Consider spending on passion assets such as antiques, art and rare collectibles. The memorable moment occurs when you acquire the asset for your personal collection. It could have been a lucky salvage hunt or a bargain buy at an antique mall or a high adrenaline auction, where you beat other bidders to acquire the product. The point is the story behind the acquisition and provenance of the asset can help yrelive the memorable moment when you narrate the experience to like-minded friends. Also, consider this. Specific experiences become generic memory over time. So, it is moot if you can consciously recollect an experience you had 20 years ago. Also, passion assets are investments; you can sell them later for a higher price.

Conclusion

Both experiences and passion assets are part of discretionary spending. You indulge in such spending to improve emotional well-being. That, in turn, impacts financial well-being. The argument is you must be emotionally happy to physically and mentally apply skills to generate active income during your working life. That is why spending on experiences and material goods (read passion assets) is important. It is debatable whether spending on experiences is better than spending on passion assets. You must determine which gives you more happiness. Then, your spending can, indeed, buy you happiness.

(The author offers training programmes for individuals to manage their personal investments)