House: An asset or liability?

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24May/093

House: An asset or liability?

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Recently talked to a friend during our "yum cha" session:

Friend: Hey! I bought a house. I think it's time for you to buy home, it is a good investment.

Me: You rent it out?

Friend: No, I will be staying inside.

Me: Come on, you are not doing investment, that's your liability...

Friend: I think it is a good investment to me ...

Me: Hmm.. you bought a home and that's your liability. To me, you just secure your capital. If your house helps you generate positive cash flow, then that's an investment ...

Friend: I have a conservative mind, I still think it is a kind of investment.

Me: Hmmm ...

What do you think.

Tagged as: asset, income, investment, liability Leave a comment

Comments (3) Trackbacks (0) ( subscribe to comments on this post )

EngLee
May 27th, 2009 - 22:42

Liability.
zewt
May 28th, 2009 - 21:47

agree… if you are staying in it… it’s a liability.
Steve Yu
May 31st, 2009 - 15:28

Like Robert Kiyosaki always said, “Your house is not an asset!”