Comment by readhn | Hacker News Reader

Comment by readhn | Hacker News Reader

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UNREALISTICALLY HIGH REAL ESTATE PRICES.

Single biggest purchase and wealth building instrument is buying REAL ESTATE / HOUSE.

Most millennials are not leaving on the streets homeless. They are paying high rent prices = money wasted = money that could have been going towards building their wealth long term, towards their homes.

High education costs prevented them from buying homes early which in turn impacted their net worth long term.

Simple example: If you buy a house in an average area when you are 30 - by 35 you have at least $50,000 that you paid towards your net worth (assuming very budget 1000/month mortgage).

Whats happening instead today? High housing costs and debt load from education prevent younger generation from bulding their wealth early through real estate. Something previous generations enjoyed.

We need more affordable housing, we need to change building codes and zoning laws to allow construction of affordable homes easily (that younger folks/families/singles can afford to buy). We need to build out infrastructure!

A home is not necessarily an asset or wealth. For the vast majority of homeowners their home is their largest liability (it costs them money).

The idea that spending money to buy a home is “building wealth” is incredibly stupid. It’s bad advice for everyone but a real estate agent.

"A home is not necessarily an asset or wealth."

a home IS an asset and wealth. it is only a liability on volcano's path on big island/Hawaii.

What kind of backwards finance is that? A house costs money, it doesn’t earn money.

An asset it something that makes you money, like rental income from rental properties, profit from a business or investment, stocks, or bonds.

A liability is something that costs you money. A house to live in, apartment, a car, healthcare, food, etc.

> An asset it something that makes you money

This is a very narrow definition not taught in accounting.

"Asset", "Liability", and "Net worth" are words with very specific meanings.

An asset is something that has value. (producing income isn't a requirement) A liability is an expense. An item can be both an asset (your home has a value) and a liability (the mortgage). The net worth is the difference.

According to accountants the food in my fridge and the cocaine on the table is an asset. Even credit card debt can be an asset according to the accountants. Accounting expenses as assets just because you can sell them is stupid.

Let’s divide the things that earn money from the things that cost money. Some of those things you can own. If they are a thing you own but cost money and you plan to consume it (house, car, food) it’s a liability. If they are thing you own that earns money or you plan on selling for profit it’s an asset.

A home could be an asset, but they usually aren’t. People don’t buy homes to sell them at a profit or rent them out, they buy them to consume/live in them (like a car). Thus they’re a liability. Most people buy a mortgage not a home, so no the house they live in is definitely not their asset. It’s the banks asset, and their mortgage is a huge liability.

A house is absolutely an asset, otherwise you couldn't leverage a house's equity as liquid capital, while you also continue to live in the house.

This kind of comment is why the phrase “not even wrong” exists.

The home is an asset. Associated expenses are liabilities.

Assets certainly don’t need to make anyone any money; unsold inventory is an “asset” most firms would be happy to be rid of...

You've taken "Rich dad, poor dad" too literally it seems. A house can be an asset or liability, depending on its use. If you live in it, it certainly earns you something, it replaces the need for renting a space to live in. If you own it and don't use or rent it, it can be a liability if it's not even a suitable investment vehicle (e.g. with stable or falling prices).

> A house can be an asset or liability, depending on its use.

A house, per se, is an asset. It may or may not have liabilities attached to it. (Or produce maintenance expenses, which is a different thing altogether.)

> If you own it and don't use or rent it, it can be a liability if it's not even a suitable investment vehicle (e.g. with stable or falling prices).

You seem to have confused a depreciating asset with a liability.

It’s the accountants who’ve taken things too literally.

A house that you own or literally anything that you own that's worth money is an asset. The fact that it requires upkeep is irrelevant.

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