Is your primary home a liability or an asset?

According to Rich Dad, Poor Dad author Robert Kiyosaki, a primary home is categorized as a liability because of the debt obligation that you have to pay down. However, after the home is fully paid off or has built enough equity, it becomes an asset because of the appreciation and the debt removal.  Paying no rent after paying off the mortgage is saving money equal to market rent.  It’s not an obvious positive cashflow, but is indirect opportunity cost savings that you may use toward other investments.  For some people, their primary home is the biggest asset that they’ve accumulated in their lifetime, other than stock options or their business.

For me, primary homes are an asset, not a liability.

Time changes primary real estate from liability to asset because the following happens over time: Loan reduction, appreciation, depreciation and rent rate increase.

Beyond the economical approach, having a forever-family home can be the best asset that money can’t replace.  The memories you create in your family home might become the best asset, especially later in life.