Wednesday, December 19, 2012

Your house is an asset

Well, techincally, it is, but not to you. If you are like the majority of americans, then you pay a morgage to the bank. Since you pay interest to the bank, it is an investment for the bank. To you, your house is a liability.
You have bills to pay for your house which takes money out of your pocket. Let me tell you exactle what these terms mean:
If you lose your job, assets will feed you, and liabilities will eat you.
Assets put money into your pocket, and liabilities take it out.
So your banker isn't lying when he/she says your house is an asset, they just forgot to mention who's asset it is.