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- 09-17-2007, 03:27 PM #1
Orange Belt
- Join Date
- Mar 2007
- Posts
- 59
Houses are liabilities, not assets
Do you agree that houses are liabilities and not assets? You should! Here's why:
I'm taking this from Rich Dad Poor Dad and paraphrasing so bear with me. A house is a liability because it causes outflow of money, not inflow. The definition of a liability is something that you have to spend money on regularly and the definition of an asset is something that generates money for you regularly. So... since you regularly spend more money on a house than it brings in for you, it is a liability!!!!!
The exception to this, obviously, is a house that you rent out and get rent for. Then it becomes an asset.
- 09-17-2007, 07:30 PM #2
Trying to be debt free
- Join Date
- Dec 2006
- Location
- Salt Lake City
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- 128
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You really did read the book. Pretty basic once you think about it, eh?
- 09-18-2007, 12:23 PM #3
Orange Belt
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- Mar 2007
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- 59
Of course I read it and it was good.
- 09-21-2007, 03:14 PM #4
Gold Belt
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- Jul 2007
- Location
- Honolulu, HI
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- 37
IMHO, a mortgage is a forced savings.
- 09-24-2007, 03:23 PM #5
Orange Belt
- Join Date
- Mar 2007
- Posts
- 59
I guess I can see what you mean but it's a pittance of a savings compared to what you actually spend on it so I still have to think it's a liability.
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