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Author: bobalactik Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Is your house really an Asset? Date: 7/11/2000 4:42 PM
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If it's true that an asset is 'something that puts money (or other resources) into your wallet' and something that isn't an asset is 'something that takes money from your wallet" - your house is not an asset. The truth is that YOUR house is your bankers asset, and your liability. Think about it in financial statement terms: the banker puts the house you mortgage out on HIS/HER ASSET section of the balance sheet, and YOU put the house that you MORTGAGE (a mortgage is a liability to you) on YOUR LIABILITIES section of the balance sheet. Along with being a liability, YOUR home mortgage incurs interest expense, which is a negative flow of capital. The house, if it was an asset, would be producing positive cash flows - and it does just that - but only for THE BANKER. Being a definitive liability, then, your home does not produce any revenues, only expenses.

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