However, there is an old saying of "you can't polish a turd", and I think that makes his example a poor one. It is notorious that you can sink a lot of money into cars that you won't ever get back out of it. That is why people that restore cars drive all around the country trying to find "solid" cars to start with. On the other hand, if you can fix it up yourself and not have to put much money into it then that does make sense.
A better example would be houses. Although even with them, if you spend money on things that you can't get money back out of (like a hot tub) when you sell it you end up in the same situation.
Comments
However, there is an old saying of "you can't polish a turd", and I think that makes his example a poor one. It is notorious that you can sink a lot of money into cars that you won't ever get back out of it. That is why people that restore cars drive all around the country trying to find "solid" cars to start with. On the other hand, if you can fix it up yourself and not have to put much money into it then that does make sense.
A better example would be houses. Although even with them, if you spend money on things that you can't get money back out of (like a hot tub) when you sell it you end up in the same situation.