Comments on: Is a home really a good investment? http://dan.hersam.com/2007/03/16/is-a-home-really-a-good-investment/ A computer programmer's commentary on news, Linux, programming, music, web design, trivia, humor, usability and whatever else strikes his fancy at the time. Thu, 20 Nov 2008 07:08:34 +0000 http://wordpress.org/?v=2.6.3 By: dan http://dan.hersam.com/2007/03/16/is-a-home-really-a-good-investment/#comment-74659 dan Wed, 21 Mar 2007 17:37:33 +0000 http://dan.hersam.com/2007/03/16/is-a-home-really-a-good-investment/#comment-74659 Have you read Rich Dad Poor Dad? He talks about how assets aren't really assets if they're not actively making you money. Have you read Rich Dad Poor Dad? He talks about how assets aren’t really assets if they’re not actively making you money.

]]> By: Joe Levi http://dan.hersam.com/2007/03/16/is-a-home-really-a-good-investment/#comment-74654 Joe Levi Wed, 21 Mar 2007 17:27:18 +0000 http://dan.hersam.com/2007/03/16/is-a-home-really-a-good-investment/#comment-74654 Dan, you're right, a home is NOT an asset until you own it (no, "own" does not mean "paying for"). A home is a LIABILITY. You MUST pay a mortgage payment each month, you must pay insurance on it, you must pay taxes on it, you must pay for upkeep, etc. When you add all that up, how much is it "worth" minus how much do you "owe" on it? If that amount is Negative (which most are), it's a liability, you owe more than you own. At least until your home is "worth" more than you "owe," at that point, theoretically, it becomes an asset. Realistically, unless something is bringing you actual income, it's still not an ASSET. Which means that it's only an ASSET on the bank's books, because your home is bringing them monthly income. Dan, you’re right, a home is NOT an asset until you own it (no, “own” does not mean “paying for”).

A home is a LIABILITY. You MUST pay a mortgage payment each month, you must pay insurance on it, you must pay taxes on it, you must pay for upkeep, etc. When you add all that up, how much is it “worth” minus how much do you “owe” on it? If that amount is Negative (which most are), it’s a liability, you owe more than you own.

At least until your home is “worth” more than you “owe,” at that point, theoretically, it becomes an asset.

Realistically, unless something is bringing you actual income, it’s still not an ASSET. Which means that it’s only an ASSET on the bank’s books, because your home is bringing them monthly income.

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