Financial Thought of the Day September 17, 2014: A Capital Illustration

My high school economics teacher illustrated the definition of capital with a cake. She said she spent $5 for the cake and asked if it is spending or capital. I said spending. Well she said it depends. If I am going to eat the cake its spending. If I am going to slice it up and resell the pieces then its capital. Its the best illustration on the definition of capital I have heard to date.