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My definition of an investment does not require that the investment return be liquid. The stock is still generating value. The house is not generating value u
by slumdev 7y ago
My definition of an investment does not require that the investment return be liquid.
The stock is still generating value. The house is not generating value unless you go out of your way to rent part or all of it.
You could just as easily rent out bicycles or hammers, but no one would go so far out of their way to class a bicycle or a hammer as an investment.
- chii 7y agoif you lived in that house you owned, then it's generating value - for you, since you're paying yourself rent! All assets generate a return, some just do so badly (or negative returns). Anything that's not an asset is a consumable (like food).
- slumdev 7y agoDo you continue paying yourself rent after the mortgage is paid? And how is the rent "income" not offset by an equal rent expense?
- chii 7y ago> Do you continue paying yourself rent after the mortgage is paid? yes, in a sense. The fact that you're not getting paid a rent from somebody else doesn't mean there isn't value. You could think of it as opportunity cost - owning a property but not getting rent from it. > And how is the rent "income" not offset by an equal rent expense? it is exactly offset-ed if you lived in that property.