Turning Consumption Goods into Capital Goods

[Ben Staples]

http://www.forbes.com/sites/timworstall/2015/08/02/uber-reduces-capital-concentration-and-increases-the-number-of-capitalists/

I thought this article was an interesting one and wanted to share. Tim Worstall writes about the deep impact that Uber, and improvements to the sharing economy have made to many peoples lives. He makes the distinction between a consumption good: something that you purchase to consume yourself, into a capital good: something that you purchase that provides you the ability to generate income.

Immediately, and I cannot be the only one, this made me think of Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter. As soon as I started listening to the podcasts and realized that almost every single guest stated this was their favorite book, I had to read it. Kiyosaki and Lechter talk about the difference between an Asset in the traditional sense, and an asset that is actually an asset. One of these will provide income, one of them will take it away. For most people, their car is a traditional asset that only serves to take hard earned income away through its purchase price and maintenance with no form of repayment.

In this way, most people think of homes as consumption goods, not capital goods like real estate investors do. Recent innovations in the tech space like Airbnb have brought the same empowerment of capital goods to everyday people for their living spaces.

The impact of technology is amazing, and I can't wait to see what comes next.

Let me know what you think, or if you found this as interesting as I did.