Comment by jjav
3 days ago
> For example, how do you book depreciation of a motor vehicle?
For a car it is particularly easy, look up its value in one of the standard sources like blue book.
What you seem to be saying is that you don't really care to track your current net worth. Which is totally sensible if you don't care about that.
But if you wanted to track net worth, then you'd need to track the actual value of everything you own, which includes adjusting the value of depreciating (and appreciating) assets regularly.
This is the kind of thinking that leads to stupid stuff like "a vehicle loses 1/3 its value when you drive it off the forecourt".
It doesn't, obviously, unless maybe one of the seats falls out or something.
Looking up the potential market value of your car regularly is exactly the kind of ridiculous thing regular people don't need to do. Just put it in your assets as "1 car" and don't think about it again. Most people aren't going to be liquidating all their assets and moving half way across the world, and even if you are you don't need to do this.
There is nothing "stupid" or "ridiculous" about correcly tracking net worth.
Also nothing wrong if you don't feel like doing it. But some people want to track value of assets, nothing stupid about that.
But it's not "correct" and doesn't make sense for the vast majority of people. Can you at least agree that a car doesn't lose any value just by driving it off the forecourt? Can you agree that people can have value in their lives that can't be written on a balance sheet?
Most people would do well to stop thinking value exists on a single dimension. It's utterly absurd when you really think about it, but too many people are indoctrinated into this world of money and just can't think any differently.
Sadly, we do all have to play the game to some extent. But you only need to understand enough about it to get by, you don't need to play day trader or treat yourself like a business that might be liquidated at a moment's notice.
The point of a post like this is to strip back the bullshit and just say it like it is: finance is a bunch of children in adult bodies playing games, making bets and doing deals with each other. It's not complicated, they just have their own secret language, just like the kids in the other clique at school did.
I guess it's upsetting to people who are either in the clique or want to be in the clique, though.
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