Is Your Own Home an Asset? 🤔

Is your own home an asset? Well, there's a technical answer and a practical answer, and I'm going to cover both the technical and the practical of whether your own home is in fact an asset. Now, most Brits over time, certainly the last few decades, have felt that that your own home is an asset. It's something that you could build your retirement pot around. It's something that you own that has equity and capital. Then you've got our friends overseas, our American friends, who would generally say your own home is not an asset. They would say that it costs you money every month in your mortgage payments and repayments. Its debt, and therefore because it does not cash flow, it takes cash flow, then it's actually a liability and not an asset. And this debate has ping-ponged over the ocean from Britain to America for decades. And I'm going to share some things I think that maybe some people haven't technically thought about. So first off, I would like to know your thoughts. Is your home an asset or not? Is it an asset or a liability? Now what's interesting, I can already see in the comments, is Vix has said it is an asset because it's a form of savings and it's a form of building towards your retirement. Josephine has said here, I rent two rooms out, therefore the house pays its way. So I'm going to give you the technical answer and the practical answer, and I'm also going to take your suggestions in the comments. So the technical answer is your home is not an asset unless you make money monthly from it. So technically, I would have to agree with the Americans. If you have a mortgage on your house and you're paying your mortgage every month, therefore your house is costing you money, not making you money. From a cash flow perspective, I'd have to say that technically your house is not an asset. However, and this is what no one tells you, it is an investment. Now you might ask, what's the difference between an asset and an investment? Well, an asset is something that produces and pays income. An investment is something that you invest in for a future return. Now here's the interesting thing. I reckon that Robert Kiyosaki, for example, who wrote Rich Dad Poor Dad, I reckon he would say that your own home is a liability, but I reckon he would say gold is an asset. Yet an asset doesn't have an income stream. Well, gold is an asset, doesn't have an income stream. Gold only has capital and store of value. Now, I don't know that for sure, I haven't asked him personally, but he likes gold. So I would say he'd probably say that gold is an asset and your own home isn't, yet gold doesn't have a cash flow. So what's the difference between an asset an investment? Well, an asset produces income every month, but an investment is something you're prepared to invest money in for a future return. And actually, you should know the difference, because by the way, Bitcoin, by definition of cash flow, is not an asset. Right now, your savings account, by definition of cash flow, is not an asset. Gold, by definition of cash flow, is not an asset, but you would, you would regard them all as investments, i.e., you're putting money in in the hope and strategy that you'll get a future return. So I would say your house is not yet an asset, but it definitely is an investment, and it's a very important one. Now Josephine looks like she's been smart here and turned it into an investment and an asset because she's rented out the rooms. But you might not want to rent out the rooms and have strangers in your house. But if you're okay with that and you've got consent from the mortgage lender, then that can be pretty smart. Also, if you've paid your mortgage off and you've got no mortgage outgoings. So here's how I really do believe your own home is an investment. Now a lot of the Americans will say you should never buy your own home, you should only rent. I think that's really bad advice, especially for Brits. I've done podcast episodes on my money podcast on that subject. I've done YouTube content on that on my More Money Secrets YouTube channel, and I've done Facebook rants on whether you should buy or rent your own home. So I'm not going to repeat any of that. You can go and watch that or listen to that. Google me. However, when it comes to an investment, here's the thing: savings right now are not an asset and are not an investment, and savings are going down in value. So therefore, it's better for you to put that savings money into your own home, pay off your mortgage over time, and build a retirement and a pension pot, or part of that you actually own and control. Do you know you do not own, therefore you do not control, your money in savings and current and checking accounts? Technically, the bank now owns that money. Now, you might think it's pretty safe unless there's a bank run and unless there's a revolution and unless there's a major crisis. And let's be honest, that's closer than it's ever been. So paying down a mortgage or having an offset mortgage and leaving your savings in your home and reducing the mortgage interest and outgoings is an investment. The next thing as to why your house is definitely an investment is because it doubles every 10 to 15 years, proven since 1952, proven since going back to 1088. In fact, in 1088, all the land and real estate in the UK was worth about £1 million. In 1952, an average flat cost you less than £3,000. Now you're well over £200,000. So actually paying into your home and living in it at the same time is building an investment that will double every 10 to 15 years. It's much safer than a pension. A state pension you don't own, the government can dip into it, the government can increase the retirement age, the government can do all sorts of shenanigans in a state pension. But your equity in your own home, you control. The next thing is the dead rent. So I could understand 20 years ago when people might rent before they buy because rents were much lower than mortgages, but now rents are equal to and sometimes higher than mortgages, and you can get help to buy mortgages with lower deposits. So therefore, if your mortgage is the same as, as rentals, you might as well get a mortgage because you're paying the mortgage down over time. You're increasing the equity and the value over time, and the important thing is you're not just wasting money. Now look, I know you need to live somewhere, but all rent is dead money. £1,000 a month, 25 years renting, £12,000 a month— a year, £120,000 every 10 years. You're talking £240,000 in 20 years in rent, dead, gone. Imagine if you put the £240,000 over those 25 years into a mortgage. Paid the house down, in the time that you paid the mortgage down completely to zero, the house had doubled or tripled. So actually, your own home technically is not an asset, but it definitely is an investment. It beats savings, it beats pensions, it gives you capital growth, it gives you relatively decentralized ownership and control. So therefore, I believe it's probably better to own rather than rent, and your house is an investment for your future which could make you many hundreds of thousands of pounds, even though technically it's not an asset because it doesn't produce income. But nor does gold, and nor does Bitcoin, because you have to sell them before you realize the money. So there you go. I'm a big fan of owning your own home, and I think you should too. So let me know what you think in the comments. What are your thoughts? Anyone want to disagree with me, by all means feel free. I only delete and ban comments that are abusive or defamatory or illegal. Otherwise, you can have your say even if you disagree. So let me know what you think in the comments. Now, it's really important that you know the difference between an asset and an investment, and hopefully this content has really opened your mind to the difference between an asset and an investment, because there is. Because I invest in gold but I am banking on future growth in 10 or 20 or 30 years and receiving the income that way, not receiving the income in recurring. But yet I have other assets that, that doesn't really have a lot of capital locked in, but it has a lot of income. I built my Rob.team membership site. I have other subscription platforms which didn't really put much capital investment but have a strong income stream. So by the way, investments can be really good, and we just assume it should be an asset, but it can also be an investment. Sometimes you're investing for the future. For the long term, for your retirement, for emergencies, etc. And those kind of investments are as necessary as assets that produce income. So if you'd like to learn how to build assets and investments, know how to invest, know how to build recurring income, passive income, capital growth income, and not just survive but thrive and protect your depreciating cash and turn it into appreciating assets, then go join Rob. Rob.team is a financial education platform. It has hundreds of hours of content to help you make, manage, and master money, to help you build multiple streams of recurring income, to help you build investments and assets and know the difference. And it costs less than a large coffee. You can cancel any time with no ongoing contract. In fact, I think a course you'll really love that's already live in rob.team— it's been in there a good few months now. Um, I put it in there when the cost of living crisis got at its worst point. A 9-module, 10-hour How to Invest series. You can get that free as a member of rob.team. A 9-module, 10-hour How to Invest series. So go grab that right now. 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I hope you enjoyed the session. I'm not going to repeat myself, just go back and watch the replay if you have another go or you need to take some notes. But just to quickly summarise, an asset is something that puts income in your pocket, but actually an investment could still be something that you want to put your money into. Your own home is not an asset. It doesn't pay you monthly income, but it is an investment because it's better than a pension, it's better than a savings account, you own and control it, and you get vast capital growth. And a lot of the American gurus who say that your own home is not an asset, they're technically right, but they're practically wrong. So I hope you enjoyed the content. Oh, also, I wonder if you might mind sharing this once you've joined Rob.team. My mission is to help as many people on this planet Get better financial education and knowledge. You know, there's not enough education on finances and money and budgeting and money emotions and management. There's not enough of that in schools. There's not enough of that in colleges. The people in college and uni who teach you money, business, economics, and finance, they're broke. They are broke. Um, so that is a bit of a fucked up system, and I'm here to change and revolutionize and disrupt that system. And someone like me who's made well in excess of 9 figures in income, has an 8-figure-a-year business income, has an 8-figure real estate portfolio. I'm teaching you stuff that works on the ground for real. Hardcore entrepreneur, working, practicing, blood on the streets kind of guy. I'm not teaching you in textbooks. I'm not running college seminars in theory, studying people from 1526. No, I'm doing it every day. I'm running 8-figure empires every day. And it costs you about 100 grand of debt over 7 or 8 years or more to get a degree, yet you could join Rob.team for less than a large coffee. Might be putting the unis out of business here. Now look, if you want to be a doctor, a dentist, a lawyer, cool, not knocking that system, that probably works well. But if you want to be an entrepreneur, a business owner, yeah, you want to do it for real, you want to be a creator, You can't— you know, you ain't learning that at school or university. You're learning that in Rob.team. So I'll see you in Rob.team. Just type Rob.team in a new web page right now. All the information is on the page. It's super quick and easy to join. You're gonna love it. There's so much content. It is time to start your side hustle. It is time to build multiple streams of income. It is time to build assets. It is time to build investments. It is time to beat inflation, beat taxation, beat the central banks, beat the government, and create multiple streams of income and financial freedom. And Rob.team is your partner on that journey, and it costs you less than a large coffee a month. So I'll see you there. Cheers for tuning in. Thanks for sharing. Thanks for following my work. You are a legend. Let me know what you think. Tag in some of your American friends who might disagree with me. I love a good debate. Everyone's entitled to my opinion. And remember, if you don't risk anything, you risk everything.