My Property Investment Tip #4

My Property Investment Tip #4
Your own home is actually a LIABILITY (not an Asset)
Controversial?! …But true! Hear me out and you will agree.
The basic definition of an Asset is something that you own that you can sell for money.
But as the old ad used to say “Oils ain’t Oils” and “Assets ain’t Assets”!
Just because something meets the basic definition of an asset, it doesn’t mean it’s taking you forward financially.
It could be going down in value (not up) and costing you cashflow money from your wages to maintain it.
It took me several years to work out the best way to teach this to people and I finally came up with the following definition of what a ‘REAL Asset’ was:
1. It must be of value and able to be sold for money (common definition); but more importantly!…
2. It must go UP in value with time (not down); and
3. It must make a profit. ie Generate and income, pay its own bills and have a profit left over.
Now think about it…. if all the assets you focussed on acquiring met this criteria would you get richer or poorer? … Answer: Richer!
Now if you acquire assets that don’t go up in value, then is your net worth going up or down?… Answer: Down!
And if they cost you money week to week (rather than make a cashflow profit), is your income growing or shrinking?…. Answer: Shrinking!
So now let’s apply the 3 rules of a real asset to some common things.
Your car.
Of value? Yes.
Go up in value? No.
Produce a profit? No.
It’s a liability!
Your house. Now prepare yourself… you’re about to realise that 99% are wrong (funny that when only 1% are wealthy ?)
Of value? Yes.
Go up in value? Yes
Produce a profit? NO!
It’s a liability!
You won’t get rich by having a big house and paying it off from your work income. Live modestly as you can. Keep your costs low and invest in REAL ASSETS.
Then when those real assets make you rich enough, build your dream home with the money then.
I hope these posts are valuable and helping people.
Let me know if you need a hand in any way.
– Daimo

Want to learn more about how property investing can secure your financial future?

Click below and gain access to a FREE webinar.

Daimien Patterson is the CEO of Integrity Property Investment, a property investment company based in Australia. He regularly produces books, blogs and videos on the topic of property investing, helping thousands of people create financial security and freedom through education and property investment. Get started today.  

Previous Post
My Property Investment Tip #3
Next Post
My Property Investment Tip #5

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

Legal Disclaimer: This information ('the information') is presented for illustrative and educational purposes only. It is not presented nor should it be treated as real estate advice, legal advice, investment advice, or tax advice. All investments involve risk and potential loss of money. If you require advice in any of these fields you should contact a suitably qualified professional to assist and advise you. Your personal individual financial circumstances must be taken into account before you make any investment decision. We urge you to do this in conjunction with a suitably qualified professional. Daimien Patterson, IntegrityX Enterprises Pty Ltd, and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers do not guarantee your past, present or future investment results whether based on this information or otherwise. Daimien Patterson, IntegrityX Enterprises Pty Ltd and their associated trading names, companies, researchers, authorised distributors and licensees, employees and speakers disclaim all liability for your purchase decisions. You should do your own independent due diligence and seek the advice of qualified advisors before making any investment decision.