I am talking to my learned Entrepreneur friends. We have been misled to believe that if you own a house you have an asset. But now that we have seen the light we no longer believe that myth.
I used to brag that I have an assets that goes in my balance sheet. Friends do you see how important it is to invest in self-development, you learn new important things that can change your life.
I have a new friend called Rich Dad’s World, I am learning a lot from him and will be sharing everything I learn from him with you. Let’s hear what he said about calling our residential house an asset.
What is an asset?
Think like an entrepreneur, an assets is something which increases in value overtime and provides a stream of revenue to the owner.
If your house does the above then it’s an asset, but if you are still paying mortgage then your house is the bank’s assets and it is a liability to you, because it takes money from your pockets every month.
If you have finished paying the mortgage and you own and live in your house, your house is still a liability because you are not receiving any cash flow from it instead you pay maintenance and other expenses from your pocket.
What kind of house is an asset?
An investment property. This is a building that you are using as a venue for your business. or you have rented it out for business. If you own the building then it’s an assets to you because it gives you money.
A house that you have rented out to tenants is also an assets.
If you’re working towards your financial goals, then understanding the fundamentals is the most important thing you can do. The lesson, your house is not an asset, is the hardest lesson for most people to understand, said Robert Kiyosaki.
I believe you have learned something.
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