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The Worst Investments You Can Make

The Worst Investments You Can Make

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It takes money to make money, or so the cliché goes. But certain investments never deliver a decent return. No matter how good they sound, it’s best to avoid them, otherwise, you’ll find yourself in an inescapable cycle of investment and debt. To help you identify and avoid these money pits, here are several of the worst investments you can make.

Cars

We’re all stuck in the Catch-22 of needing a car but having it drop in value the minute we leave the lot. Cars depreciate so quickly that they can lose 60 percent of their value within a few years. Leasing is an even worse idea than financing because you’ll pay even more to purchase the car at the end of the lease. If you do finance, pay off the car as quickly as possible and you’ll save on the interest. Your best bet with a car is to buy used and maintain it well enough to eventually ensure a comparatively higher resale value.

Timeshares

It sounds like a good idea. Have a favorite destination you visit every year? Instead of paying for a hotel, wouldn’t it be cheaper to buy a local piece of property you can consider your vacation home away from home? If you’re thinking of a timeshare, then the answer is no. For a place you’ll only stay at one week out of the year, timeshares are a lousy investment. Never mind the deposit and final cost, you’re committed to paying fees, taxes, and other extra costs every year. Selling a timeshare is almost impossible, and if you choose to break the contract, you may be subject to all sorts of legal troubles. In no uncertain terms, timeshares are one of the worst investments you can make. It might be best to stick with hotel rooms and bed and breakfasts.

Houses

The real estate bubbles of the past few decades were anomalies, so forget about making X times more money than you paid for your house when you decide to sell. As an investment, houses demand more money—namely your mortgage (with interest), taxes, upgrades and repairs, and utilities and services—than they give back, and they don’t give anything back until you sell them, if then (and remember that your real estate agent and lawyer get their cut). Though, keep in mind that if you buy a house to make it your home, you’re getting something out of it, even if it’s only shelter and warmth.

Pop Culture Collectibles

Finding a rare comic book, baseball card, or toy in grandpa’s attic is an enduring fantasy. But Action Comics #1, Mickey Mantle’s rookie card, and rocket-firing Boba Fett action figures are considered treasures because they’re the rarest of the rare. Unfortunately, the idea of collectability is extended to too many pop cultural items, to the point where value and demand is manufactured by dealers, collectors, and publishers. Hold off on dropping $100 on a comic, card, toy, or similar bit of pop culture ephemera produced in the past few decades.

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