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re: Crossed the 100K net worth barrier over the weekend
Posted on 4/14/13 at 1:28 pm to Vols&Shaft83
Posted on 4/14/13 at 1:28 pm to Vols&Shaft83
quote:. That's just eaten up with stupid.
Vols&Shaft83
1
Posted on 4/14/13 at 1:31 pm to Vols&Shaft83
I don't know what point he's necessarily making along those lines.
If there is economic value in the house that the proprietor can convert into cash, then yes, it would be considered an Asset irrespective of its cash flow generating ability.
I'm okay with him using "Liability" in a layman sense here but that's his own Dave Ramsey-esque definition and not consistent with financial theory as to what constitutes an "Asset," either on a corporate or personal balance sheet.
If there is economic value in the house that the proprietor can convert into cash, then yes, it would be considered an Asset irrespective of its cash flow generating ability.
I'm okay with him using "Liability" in a layman sense here but that's his own Dave Ramsey-esque definition and not consistent with financial theory as to what constitutes an "Asset," either on a corporate or personal balance sheet.
This post was edited on 4/14/13 at 4:01 pm
Posted on 4/14/13 at 1:34 pm to HNTIGER1980
A house is only an investment asset if you are looking to sell it eventually. Otherwise, a high property value is a liability due to increased costs of property tax.
Idiots like to hock engagement rings as an investment, but once again, unless you plan to sell it, it's not an investment asset, it's just a sunk cost.
Idiots like to hock engagement rings as an investment, but once again, unless you plan to sell it, it's not an investment asset, it's just a sunk cost.
Posted on 4/14/13 at 1:44 pm to OTIS2
If something costs more than it produces, is that not a liability?
Posted on 4/14/13 at 1:45 pm to Vols&Shaft83
No.
Posted on 4/14/13 at 1:46 pm to acgeaux129
I'm sure every successful business owner in history would disagree with you.
Posted on 4/14/13 at 1:47 pm to Vols&Shaft83
no
ETA: if you're saying a home isn't an investment then I can see that
ETA: if you're saying a home isn't an investment then I can see that
This post was edited on 4/14/13 at 1:48 pm
Posted on 4/14/13 at 1:50 pm to Vols&Shaft83
Really? You're sure? Permaban bet (outright, all boards) type of sure?
Posted on 4/14/13 at 2:02 pm to HNTIGER1980
quote:
HNTIGER1980
Your thread went retard fast enough to impress the OT. To answer your OP.
...how to keep it growing? Don't rest on your laurels. Keep being a tightass and saving money. Spend like you're on raise behind.
Nothing wrong with buying a house if you intend stay in one place for 5+ years. Just don't fall into "bigger is better, my house is an investment" trap. Yes a house is an asset that (usually) appreciates, but bigger house = more expenses intaxes, utilities and possibly maintenance. Buy what you need and that's it.
Posted on 4/14/13 at 2:11 pm to Vols&Shaft83
quote:
Your house is not an asset, even if it's paid off. It ALWAYS costs money to own a home. Asset= Puts money in your pocket Liability= Takes money from your pocket.
False
It costs money to pay an employee or operate a factory, does that make them liabilities?
This post was edited on 4/14/13 at 2:12 pm
Posted on 4/14/13 at 3:08 pm to yellowfin
quote:
ETA: if you're saying a home isn't an investment then I can see that
That's what I'm saying.
I own 2 rental properties, which after taxes and expenses, generate an income of $1100/ month. I could sell them for slightly more than I paid for them if I needed to. I consider these to be assets because they are producing income, regardless of what the housing market is doing. Now if they aren't being rented, they cease to produce income, and my profit is contingent upon what I can sell them for. Therefore they'd become a liability because they'd be costing me money to maintain.
I don't consider my personal residence an asset until I sell it.
Posted on 4/14/13 at 3:09 pm to Chris Farley
quote:
It costs money to pay an employee or operate a factory, does that make them liabilities?
If the factory fails to produce a profit, than yes.
Posted on 4/14/13 at 3:42 pm to Vols&Shaft83
So you just rotate things around the balance sheet depending on performance?
Posted on 4/14/13 at 3:50 pm to Vols&Shaft83
well asset =/= investment
Posted on 4/14/13 at 3:55 pm to Chris Farley
quote:
So you just rotate things around the balance sheet depending on performance?
If a business has more outgo than it has income, it goes broke. How hard of a concept is that?
When a company can no longer be profitable by keeping 100 employees,but can be with 80 employees, what does the company do? They lay 20 employees off.
Posted on 4/14/13 at 4:08 pm to yellowfin
It's simply a different way of financial thinking. It won't agree with traditional finance, as any banker will tell you your house is an asset regardless of cashflow, but it is a financial mindset that Kiyosaki preaches. Perhaps he should develop a whole different term instead of "asset" so as to not confuse traditional thinking. It doesn't necessarily abide by the definition.
Posted on 4/14/13 at 4:13 pm to Vols&Shaft83
1. That has nothing to do with what I asked.
2. It's not that simple.
2. It's not that simple.
Posted on 4/14/13 at 5:41 pm to Vols&Shaft83
quote:You're really digging yourself a hole here. Just buy an accounting for dummies book or read wikipedia. You are confusing general slang descriptions with actual business definitions (and practical ones, not just academia here).
I'm sure every successful business owner in history would disagree with you.
Posted on 4/14/13 at 5:50 pm to Bayou Tiger
quote:
You're really digging yourself a hole here. Just buy an accounting for dummies book or read wikipedia. You are confusing general slang descriptions with actual business definitions
*Sigh
Are you saying that a business that has expenses that exceed it's gross profits is successful? Or are we misunderstanding each other?
Posted on 4/14/13 at 5:56 pm to Vols&Shaft83
Do businesses that are losing money have any value?
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