Hello All,
In light of the recent supreme court’s decision in Heller v. District of Colombia, we wanted to repost this piece we did last year on why guns are not investments.
As probably know, Americans love guns. Since the dawn of our country firearms have played prominent roles in politics and society. Currently half of American households own a gun and many others advocate the rights of the individual to bear arms*. While firearms are a hugely controversial political and social issue, the focus of this posting is purely on the impact of firearms ownership for personal finance. From a strictly monetary standpoint, firearms are NOT a good pecuniary investment.
Guns are financial liabilities. By this, I mean two things. First, guns often depreciate in value after they are bought. Second, owning a gun often obligates one to purchase a number of other things as well. For example, if you own a firearm, you might need to pay for:
1) Higher insurance premiums
2) Costs for ammunition and accessories
3) Costs for security
4) Fees or expenditures for target shooting
5) Licensing fees
Some of these expenditures can be quite hefty. For example, a large gun safe can cost several hundred dollars. The cost of even a modest amount of ammunition can run upwards of $50 or more.
There are some times when the value of firearms may increase, such as if you have a rare type of collector gun, or if the public responds to gun control legislation by increasing demand for firearms and ammunition. However, all things being equal – if you are interested in building wealth, you should be putting your money into investments that will improve your financial bottom line, NOT buying guns or other depreciating assets.
Best,
James
*Click here for more from wikipedia.
