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I want to ask you, is your house an asset or a liability?  To most people they see it as their biggest single asset.

But, in reality, for a lot of people I see it is actually their biggest liability.

Why do I say your house can be your biggest liability?

Admittedly, people do need somewhere to live and if they did not own a house they would have to pay rent.  Owning a house can be a way to minimise and reduce their living expenses.  So I am all for people owning their own home.

But I am sure you know someone who lives in the biggest and flashiest house in your area.

Do they really need to live in that house, or could they live just as well in a smaller more austere house?  Chances are they could.

Think about what comes with a house. Usually a mortgage, rates, taxes, insurance, repairs and maintenance.  Are these the same for all houses?

No, the bigger or flashier the house, the bigger the mortgage I bet.  Same with rates, insurance and repairs.

For whatever reason, they have a bigger and flashier house than they need to. What does this mean?  They have the “privilege” of paying out more cash than they need to, just to live in that particular house.

Of course, owning a house can be a way of reducing the amount of cash you pay out, thereby reducing your liabilities.  But if you go too far, it becomes a money pit swallowing up cash that could be used to buy assets.  In a later chapter I will show you how much your house could be costing you.

Hence for some people, I call their house their biggest liability.

Is your house your biggest liability?

Do you and your family a favour and start taking steps so you can improve the health of Your Wealth and get off the treadmill of working till you drop.

Wayne Wanders

The Wealth Navigator

wayne@thewealthnavigator.com.au

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