Well, talk to the "old timers" who have been through housing market
depressions. The lesson learned from the internet bubble in stocks is
that everything does not go up. In the long run, it does however, how do
you know when you will need to sell? what if the market is in a trough
the next time you must sell. Don't confuse your current success with pure
dumb luck.

I calculate net worth just like a company does. NEVER write an asset up..
only write it down. This means always calculate the value of your home at
the price you bought it for. Even if you do additions etc... consider
those expenses. This conservative accounting will make you wealthy.

My fear is that people overestimate the value of their home and then
don't save thinking "well my home is worth xxx." Then they are caught.

AlexGowes[at]yahoo.com (Alex Gowes) wrote in
news:1f1d9db2.0308301844.6229e85b[at]posting.google.com:

- quote -

AlexGowes[at]yahoo.com (Alex Gowes) wrote in message news:<1f1d9db2.0308301844.6229e85b[at]posting.google.com> ...

smartmoney.com did quite a nice demolition job on Kiyosaki. He seems
to be something of a charlatan.

A good view of housing wealth is in 'The Millionaire Next Door' and
'The Millionaire Mind': wealthy people own nice homes, but not the
best homes, but in good neighbourhoods. They do not overconsume by
having too much of a house.

The short answer is home ownership is an activity massively subsidised
by the tax system and also, to some extent, by the zoning system:
therefore probably most Americans who can should own their own home.
But don't count on housing prices to go up all the time, just because
they have in the past: local market factors are extremely important,
and there are numerous signs that US housing prices have moved well
ahead of fundamentals (ie rental value of homes).

On 31 Aug 2003 10:55:05 GMT, AlexGowes[at]yahoo.com (Alex Gowes) wrote:


- quote -

My suspicion is that you can find lots of examples of both points of
view. My own is that it depends on how long you own the home, when,
and when the large costs cycle.

For example, we've been in our present home 21 years and have done two
roofs, about 10 paintings of various areas, re-paved the driveway,
changed furnace and AC, multiple plumber/electrician visits, taken
down several large trees (at $1000/pop), and that's all I can recall
without checking records. These are all costs - I have omitted
improvements, which could increase value.

Further, it seems that every time I walk in the neighborhood there are
vehicles of every description... roofers, plumbers, cable/phone, tons
of lawn/garden maintenance teams, electricians, carpenters, etc. So
I'm not alone.

On the other hand, my last corporate stop was Denver (1980). There we
made a ton (peak of the oil market and Denver was in the thick of it)
and had no major repairs.

-HW "Skip" Weldon
Columbia, SC

Some parts of this book are useful "wakeup calls" to begin to think
about some aspects of financial planning such as the benefits of real
estate, passive income etc. for those who haven't thought about these,
but I can't help feeling that much of the book is so vague and
rambling that's it net value is quite minimal. The disparaging tone
used to describe his real dad is sad to see (wonder what lies deeper
in that relationship).

But the point I think is nonsense is the idea that a house is a
liability, not an asset. In my own investing, I have never had a
better investment than my own home. When I moved cities a year ago,
the increase in value of my old house was such that I got back ALL of
my mortgage payments from the previous 9 years, plus more money, and
had the tax break on interest during those 9 years. In other words,
not only had I lived for 9 years rent-free, I made money doing that!
It seems to me that Kiyosaki is dead wrong on this point.