Quote:
Originally Posted by NachtRitter
If we want to figure out the money, effort (in $$), depreciation, etc. that it costs to get the car ready vs what we get out of the car is greater than 1 (indicating positive return) or less than 1 (indicating negative return), what would you call it? Not "ROI"? Is there a different well understood term that conveys the same meaning?
I understand that a person shouldn't expect the value of a vehicle to go up, but it is still a tangible asset and is still providing some kind of return. Just like any investment, the ROI can be positive or negative. For a vehicle, it may not be in simple $$ terms, but in most cases it can be distilled down so it can be calculated in $$ terms. For instance if you have to go somewhere regularly (e.g. commuting), you can calculate the value of your time which you save vs walking or cycling (calculation depends the value you place on your time, of course). Obviously even a cheap car can do the job, but if it's not reliable then you have to add the cost of fixing in there as well... which might highlight that a newer or more expensive, more reliable car is a better way to spend your money.
I'm not going to say that the ROI (or whatever you want to call it) on a vehicle is going to come out positive, only that the same concept can be used to figure out how much (or little) it is costing vs alternatives.
The same goes for FE modifications... Some $$, effort, reduction in resale value (maybe) is being put in with the expectation of some reduction in fuel consumption... the first part is the investment which includes tangible assets (which will depreciate very quickly in this case) while the second is the return in the form of improved efficiency.
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Here the term (ROI) is being used very broadly by the OP, outside the use of the term in the conventional way.
You (and the OP) are using the term broadly as to include any activity or perceived asset. One could say "I am invested in my _____". In marriage, your investment would be your spouse. Or your "investment" might be in the future of your children. If you are patriotic, you might consider your investment to be taking an interest in your country. Et cetera. However these are not financial investments. The term ROI specifically refers to financial investments, not to all these other perceived values or interests.
Strictly speaking, one enters into any investment expecting to make a financial profit (AKA a 'return'). Otherwise it is not an investment. If the term is used so very broadly as to call vehicle ownership a financial investment, it is a very poor financial investment indeed, since the financial return will be a negative one or a loss. Unless you are a used car turnaround specialist it is difficult or impossible for the average vehicle owner to profit financially from ownership of a motor vehicle.
Actually what you are referring to is the cost of ownership and whatever perceived benefit might be derived from it. But that's apart from the conventional usage of the phrase 'ROI'...
In effect the title of the thread acknowledges this,
for "money spent" is not money invested.