| The Shanghai car plate is not an asset. Here's my reason: (a) You pay a "big" amount of money to buy the car plate. Under these condition you can make money out of it: (1) the car plate biding price keep rising, and fast enough to balance inflation; and (2) you decided to sell your car, and not driving again. Otherwise, you get nothing from this payment. Your risk and cost: (1) car plate biding price will not rise all the time, policy change can substantially change the value of it. (2) You lost the opportunity to invest that money into other more secure, higher return assets. (b) Instead, you use part of that money (equal to the amount to acquire a Shanghai plate) to register a car at nearby city, and put the other part of the money into some real investment asset. Let's analysis this option. Real investment asset could be house (assume you can buy a tiny apartment and someone wants to rent it),stock, bond, or simply bank deposit (If you lucky enough to find a "stupid" bank willing to pay you higher interest rate than inflation rate.) If any of these choices yield extra money that can cover inflation, also cover the expenses related to a non-Shanghai plate (not including the compensation for a non-pleasant feeling at HZ for renewing you plate cause it is hard to measure the value of feeling), then you generate a positive cash flow out of your money. That's an asset! |
Shanghai Car Plates IS Investment