Fawaz Economics 101

You own a car.

You bought that car for £5000 2 years ago second hand.

The car is in excellent condition and all the working parts are in order, though lately a few parts had to be traded in and cheaper less quality ones used. It has an excellent service record up till a few years ago when it wasn’t quite kept in the right working order and it nearly failed its MOT because corners were cut.

You have put £40 a week into that car in Petrol, plus the costs of various parts meant you have probably spent another £500 in the two years or so. All in all, as well as a couple of fancy decorations you have spent £6000 over those 2 years.  What is the car worth now?



Clearly the car is now worth £10,700.

That’s what you have spent on it.

So if you sell 80% of it to a car dealer, but you can arrange to still drive it around and be able to get a share on an extra profits from the car being sold. In fact they should pay you £1000 a year to drive it!!!

Genius.

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