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readhn | karma 438 | avg karma 0.78 · 2019-06-02 01:12:52+00:00

"A home is not necessarily an asset or wealth."

a home IS an asset and wealth. it is only a liability on volcano's path on big island/Hawaii.

simplecomplex | karma 266 | avg karma 0.62 · 2019-06-02 02:41:28+00:00

What kind of backwards finance is that? A house costs money, it doesn’t earn money.

An asset it something that makes you money, like rental income from rental properties, profit from a business or investment, stocks, or bonds.

A liability is something that costs you money. A house to live in, apartment, a car, healthcare, food, etc.

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kcb | karma 2163 | avg karma 2.86 · 2019-06-02 03:41:42

A house that you own or literally anything that you own that's worth money is an asset. The fact that it requires upkeep is irrelevant.

empthought | karma 1279 | avg karma 1.58 · 2019-06-02 04:27:54+00:00

This kind of comment is why the phrase “not even wrong” exists.

The home is an asset. Associated expenses are liabilities.

Assets certainly don’t need to make anyone any money; unsold inventory is an “asset” most firms would be happy to be rid of...

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bdcravens | karma 20814 | avg karma 2.3 · 2019-06-02 04:43:15+00:00

> An asset it something that makes you money

This is a very narrow definition not taught in accounting.

"Asset", "Liability", and "Net worth" are words with very specific meanings.

An asset is something that has value. (producing income isn't a requirement) A liability is an expense. An item can be both an asset (your home has a value) and a liability (the mortgage). The net worth is the difference.

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simplecomplex | karma 266 | avg karma 0.62 · 2019-06-02 04:58:41

According to accountants the food in my fridge and the cocaine on the table is an asset. Even credit card debt can be an asset according to the accountants. Accounting expenses as assets just because you can sell them is stupid.

Let’s divide the things that earn money from the things that cost money. Some of those things you can own. If they are a thing you own but cost money and you plan to consume it (house, car, food) it’s a liability. If they are thing you own that earns money or you plan on selling for profit it’s an asset.

A home could be an asset, but they usually aren’t. People don’t buy homes to sell them at a profit or rent them out, they buy them to consume/live in them (like a car). Thus they’re a liability. Most people buy a mortgage not a home, so no the house they live in is definitely not their asset. It’s the banks asset, and their mortgage is a huge liability.

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root_axis | karma 10530 | avg karma 3.57 · 2019-06-02 07:13:34+00:00

A house is absolutely an asset, otherwise you couldn't leverage a house's equity as liquid capital, while you also continue to live in the house.

lazyjones | karma 5054 | avg karma 1.69 · 2019-06-02 05:13:22+00:00

You've taken "Rich dad, poor dad" too literally it seems. A house can be an asset or liability, depending on its use. If you live in it, it certainly earns you something, it replaces the need for renting a space to live in. If you own it and don't use or rent it, it can be a liability if it's not even a suitable investment vehicle (e.g. with stable or falling prices).

simplecomplex | karma 266 | avg karma 0.62 · 2019-06-02 05:20:35

It’s the accountants who’ve taken things too literally.

dragonwriter | karma 118260 | avg karma 2.17 · 2019-06-02 05:59:27

> A house can be an asset or liability, depending on its use.

A house, per se, is an asset. It may or may not have liabilities attached to it. (Or produce maintenance expenses, which is a different thing altogether.)

> If you own it and don't use or rent it, it can be a liability if it's not even a suitable investment vehicle (e.g. with stable or falling prices).

You seem to have confused a depreciating asset with a liability.

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