Most financial experts will expound on the fact that a home is an asset. Is this really so? An asset is something that should be providing some type of value, increasing in value, or providing cash flow. My opinion.
Robert Kyasaki, author of Rich Dad Poor Dad, stated that his rich dad’s definition of financial wealth was having $10 million in assets producing a million dollars a year of passive income.
Most of us do not need a McMansion. Most people over build and become house poor due to the associated costs of maintaining a home: taxes, utilities, insurance, maintenance, furniture, etc.
Buying a home to live in is not a retirement vehicle or a way to impress our neighbors and friends.
Pay off your mortgage ASAP. People who say they don’t want to do this as they can deduct the interest they are paying off of their taxes. Bull. What happens if you lose your job, get sick, etc.
A while back the government provided a $8,000 rebate for new homeowners. What do you think people did with the rebate? Spent in on lifestyle.
Definition of an asset: Something that has the potential to increase in value and or produce income.