Burning the Furniture

Imagine you have a short-term financial emergency. You’re cash-strapped and some bills are due. So you decide to sell your car.

Now in some instances, selling off assets is a perfectly reasonable response to a financial emergency. If you have a beautiful piece of art that you enjoy, it still might make sense to convert that into liquidity when the times are tough. It might even make sense to downsize your car – if you have an expensive vehicle and can sell it for enough money to buy a more sensible one with cash left over, that could be a good move.

But just selling your car outright is probably not the best idea. Your car is, among other things, a capital asset. It generates money – or at least, it can.

Don’t burn the furniture to stay warm. Be willing to do anything it takes to survive, but don’t rush to the most extreme versions. The last things you should ever cut from your life are the things that generate resources.

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