What Does Robert Kiyosaki Mean When he Says That Your House is Not an Asset?

And that it is only an asset to banks and mortgage companies?

Source: Morning brew on Unsplash.

Kiyosaki’s reality flies in the face of financial planners, real estate agents, brokers, and banks who need to make money.

A house, on its own, as a property, is an asset. But what most Americans don’t realize today is that they aren’t purchasing the home. They are purchasing something called a 30-year mortgage, and they see a tiny interest rate.

Source: Mortgage of a 500,000 house, at 4%, 30 years, fixed at year 15.

Here is a $500,000 home, with $40,000 down at 4% interest over 30 years. I haven’t included property taxes, insurance, or maintenance over the 15 years yet. Even then, your interest paid toward the home for the first 15 years totaled $250,000 while your principal paid was just shy of $160,000.

If you include the taxes, insurance, and the maintenance, you’d likely reach a sum of around $50,000–$100,000 on top of your interest.

That’s nearly the entire value of your home, just calculating cash flow, in the first half of your mortgage.