10 Assets That Won't Increase Your Net Worth

Among the constellation of important financial figures and measurement tools available to consumers, the net worth calculation is one of the easiest to make, and yet something that too few people engage with. Components of this conversation are spelled out in plain English all the time: For instance, reaching $1 million in net worth is the hardest barrier to cross. Certain savings strategies are also frequently talked about when looking for ways to speed up net worth accumulation. But too often, people fall into the trap of sabotaging their upward trajectory when it comes to financial wealth. It's easy to say things like "just keep saving," or "cut out those business lunches" when talking about ways to improve your budgetary health. But over the long term, there are numerous pitfalls that come into consumers' lives to derail their progress in other, more meaningful ways.

Specifically, there are lots of purchases we all make as consumers that can positively or negatively impact personal wealth. Some financial pundits might takes this down to the micro level and talk about the opportunity cost of buying a new pair of shoes versus investing that cash in a retirement account. In some instances, these minute details are worth chasing down. But on the whole, there are plenty of financial choices that people frequently make that can negatively impact net worth right here in the present before creating lasting impacts for the future. These assets might feel like important purchases in the here and now, but they either don't help your net worth voyage or actively harm its long term ascent.

In 2024, MarkLines reports a total of 16.8 million brand new cars were sold in the United States (up from 15.9 million the year prior). A new car loses around half its value in the first three years of its life, creating a drastically negative financial profile in the process. The trouble with a new car is primarily found in the way a buyer views the asset. All vehicles, regardless of age or type, deliver on a specific promise. Your car is your primary mode of personal transportation. As long as the vehicle operates, it is fulfilling this duty. More expensive cars tend to provide a more comfortable or otherwise enriching experience while on the road, But a clunker that gets you from point A to point B is just as valuable as a brand new luxury sedan when it comes to the basic job of getting you from place to place. As a result, you should always think twice before buying brand new car.

Newer, luxury-focused models tap in on the cache of human vanity. People want to drive around in nice cars that show off their wealth and status. But if you're financing a car, something that Autoblog found 37% of used car buyers did in early 2025 and most new buyers do, then you are throwing away money, largely unnecessarily, by investing in a vehicle that's increasingly more expensive for the sake of appearances. There is virtually no chance that your car appreciates in value over the long term, and the more you pay in interest the less financial value you'll get out of your vehicle.

There is absolutely a time and place for people to buy more expensive clothing items rather than just sticking with cheap threads. Expensive clothing tends to last longer than the cheap stuff, and so it's entirely possible to gain value by investing strategically in upgraded items of clothing. However, designer items and similar luxury purchases don't typically fit this mold. These are expensive purchases that justify their price with a flashy logo and may not actually deliver durability and quality.

Designer items might look and feel great, and there's something to be said for the intrinsic mental boost that comes from feeling like you look good. However, this same enhancement of your image can be achieved with more strategic purchases. At the end of the day, these are just clothes unless you're actually at the extreme end of the wealth spectrum and investing in couture pieces that can genuinely provide investment value. But for the vast majority of consumers, this isn't the case. Regularly spending more than you need to on clothing will fill up your closet with items you don't wear all that frequently (with individual clothing items getting worn an average of seven times before being tossed) and shrink your net worth by diverting important funds in the process.

Whole life insurance is an interesting asset to consider. Life insurance can be an incredibly valuable backstop to support your family in the event of a tragedy. Whole life coverage is self-explanatory in that it doesn't feature a coverage window. Some insurance policies provide carveouts to initiate a benefit payment for those who have been diagnosed with a terminal illness, but generally speaking you aren't going to be the one who reaps the rewards of your investment. Some life insurance purchasers will want whole life coverage. But for many consumers, term life insurance is actually the better deal.

Whole life policies can be five to 15 times more expensive, and they introduce a cash value into the equation, complicating things a bit. Even so, you're unlikely to actually accumulate value in this arrangement the same way you would with something like a stock market or real estate investment. In fact, if you keep up with payments throughout your entire life, you may ultimately end up spending more on the policy than your benefit amount pays out.

Many purchasers are actually seeking income replacement to care for their family's financial needs in the event of a tragedy. This means that coverage is either less important or no longer necessary when children grow up or the buyer retires and stops drawing a paycheck. It may be worth comparing the price of a term policy and a whole life insurance coverage option, selecting the term policy and then investing the difference in a separate fund on your own.

There are absolutely some pieces of jewelry out there that act as investment opportunities. Unfortunately for the average consumer these purchases exist far outside the price range that many will be ready and able to consider. For the most part, jewelry is not an appreciable asset. Even a large diamond engagement ring tends to lose value rather than gain it. This is because diamonds are sold at a supreme markup when set into jewelry. You're just not likely to see a price surge heavy enough to surpass the premium paid for the completed piece.

This isn't to say that jewelry is a total waste of money. This is an investment that goes more towards sentimentality and shared memory than acting as a financial reservoir. Understanding this relationship is critically important in any jewelry investment you might make. Splurging a little on a nicer stone or better quality metal for someone you love might be worth it to you in certain circumstances. But you shouldn't be going overboard on the expense thinking that it will deliver some sort of additional, financial stability. Jewelry just isn't a valuable investment asset in this way.

Reward programs are a big draw for credit card users. Card issuers go out of their way to highlight the many ways in which cash back rewards or point building opportunities can enhance other areas of your lifestyle. Indeed, responsible use of a credit card account that delivers a steady stream of rewards back to you can be a nice way to buoy your personal finances. But the reality is that the average card holder accumulated cash back to the tune of around $280 in 2024. That's a nice trickle of additional value, but it's not going to fund your next vacation or pay the mortgage. More importantly, the only way you'll actually enjoy these rewards is if you pay off your credit card balance in full every month. Spending on your credit card and then allowing those purchases to accumulate interest negates the value of these bonus payouts. If you rack up $280 in cash back rewards but have to pay $300 extra in interest on the balance that you've carried over from month to month throughout the year then you're actually an extra $20 in the hole over where you would find yourself had you never pulled the credit card out of your wallet in the first place.

Rewards cards offer a colorful vision of free money and points that can be used for travel and other luxuries with the intention of enticing buyers into spending more than they normally would. This financial tool can be valuable. But you must use it responsibly and consistently pay off the balance in order to actually benefit from the promises your cardholder agreement makes.

Timeshares are a lousy use of your financial resources from start to finish. It's impossible to say definitively that any particular approach to financial management is universally good or bad, but if there was ever a candidate for this kind of distinction it would be the timeshare. Timeshares are heavily maligned in pop culture for a reason. Everyone instinctively understands that if the value these real estate investments produced for buyers was as good as the sales pitch suggests then two outcomes would be undeniably present in their market. For one thing, many more people (than the roughly 10 million American households at present) would own a piece of a timeshare, and secondly, salespeople involved in peddling these "investment opportunities" wouldn't have to work nearly as hard as they do to get buyers to sign on the dotted line.

Timeshares age poorly for investors, and they do so in a hurry. You'll generally have trouble utilizing the property at times that actually suit your needs and schedule, and in many instances annual maintenance fees continue to rise every year. Maintaining your stake in a timeshare can become prohibitively expensive in a matter of years not decades. Unfortunately, there's one final aspect of the timeshare conundrum that often sticks around to complete the cycle of abuse. It can be incredibly difficult to get out of an agreement, and they can even include language about other people inheriting the financial obligation after you have passed. Timeshare buyers have ultimately spent thousands to buy their way out of what seemed like a great vacation investment.

Boats, hobby motorcycles, RVs, and ATVs, among numerous other recreational vehicles, exist in their own world of the transportation marketplace. At a baseline level, these are assets that can help you get where you're going in style. But recreational vehicles of this nature aren't built specifically for transportation but rather for fun. Many boat buyers have invested in an aquatic vessel with the proceeds from their tax refund, only to find that ownership costs and maintenance dramatically increase the total financial responsibility of boat ownership. The same can be said for many other recreational tools.

There's nothing inherently wrong with buying a boat or dirt bike to get out into nature on the weekends and explore a new slice of what your community has to offer. But these vessels suffer from the same fate that your car brings into the picture. It can be easy to think of these as investments rather than fun purchases. After all, an RV, boat, or motorcycle is expensive. It stands to reason that you'll potentially enjoy a competitive market to resell these kinds of hobby tools at some point in the future. Unfortunately, these assets also depreciate rapidly in value and buyers should not expect to recoup their costs even if they change their mind quickly. These can be a nice lifestyle addition but they shouldn't be part of anyone's ongoing financial plans unless it's firmly understood that the asset won't add to the bottom line.

College is a unique asset. It's one that can be wielded for healthy financial gain, and at the same time exists as a totally intangible experience with no specific "trade" value. College graduates receive a piece of paper that they hang up on the wall, and a lifetime of memories that help shape who they are as a person. There's a considerable wealth of value that going to college imparts. But a college education is more costly than ever before. It's almost twice the price to go to college today as it was in 2005. In practical terms, this means that a typical college student today could have a parent that paid half the rate, while 20 years before that, their grandparents might have spent only around 10% as much on their degree. This is an exponentially growing curve that's becoming unsustainable as more people choose to pursue higher education, thus ballooning the pool of job seekers with degrees while searching for work that pays less in real wages and spending more for the privilege.

Going to college can be a vastly enriching personal asset, but it's not one that brings in direct financial value. To add insult to injury, there are numerous career paths that pay great wages without requiring a college education as a prerequisite. It's entirely true that going to college can raise your salary ceiling by a significant margin. But it does not guarantee higher wages and as a purely financial investment going to college can easily count as a waste of money.

With technology dominating the workplace today, many commuting to their office or working from home log in on a laptop computer that's loaded up with software designed to help them do their job. There are absolutely still many professions that require physical implements to get the job done, but many workers across the employment landscape utilize tools that might cost a notable amount of money but won't bring back major financial value if a lifestyle change or retirement opportunity creates the conditions to sell these assets. Software packages nowadays run on license agreements rather than physical installation disks that buyers own. For instance, the 2013 version of Microsoft Office focused heavily on internet tie-ins and the 365 variant of the software package did away with physical discs altogether. While it's long been a licensed tool that requires a product code to activate, without discs to install the software a buyer has virtually nothing in the way of ownership.

A similar trend has taken place in the farming community, with John Deere holding agricultural workers hostage by suggesting that physical equipment is licensed to buyers just like software, a non-tangible good. The company enforces this mindset by attempting to manipulate owners' right to repair. As a result, across a broad spectrum of gear you might rely on to perform your work, resale value is murky at best and perhaps even nonexistent.

The home you live in is often a target of wishful thinking and upgrade opportunities. Whether you're someone who frequently looks to incorporate DIY home improvement projects into your routine or you're actively in the market for a change of scenery that might involve a larger or more luxurious home, the real estate space is a fraught place. Investing in "too much house" or sinking too many resources into enhancements that won't return expanded financial value limits your financial mobility in the present. It also serves as a potential stumbling block long into the future and can hinder your ability to meet your retirement goals or save for other important life expenses like vacations with the family or even delay the decision to start a family in the first place.

A home is generally thought of as a net-worth-enhancing asset; real estate typically increases in value over time, adding to your financial math rather than subtracting. Since 2000, annualized home value increases have come to the tune of 4.7%, and since 2012 the rate has been clocked at 7.7%. But that rosy outlook hides a different facet of home value math that can easily become a sticking point. If you're struggling to maintain mortgage payments while keeping all your other balls in the air, there may ultimately be a hidden cost to keeping the home that you aren't seeing. You'll enjoy a gradually rising home value, but might not have the financial leverage to afford other important things in life. To make ends meet you might need to go back to the well numerous times to refinance your mortgage, eviscerating that value gain to fund your present lifestyle.