Is the House You Live In an Asset or a Liability?

Let’s be honest: most of us grow up believing that buying a home is the smartest financial decision we’ll ever make. It’s safe, solid, and long-term. But is it really an asset?

According to Robert Kiyosaki, author of Rich Dad Poor Dad, the answer is no. He famously says:

“An asset puts money in your pocket. A liability takes money out.”
So by that logic, the house you live in is a liability — and it kind of makes sense.

The Hidden Cost of "Owning"

When you buy a home to live in, you’re not making money off of it. Quite the opposite:

• You take on a mortgage (often 30+ years)

• You pay utilities, maintenance, and property taxes

• You deal with renovations, leaks, unexpected repairs

• You’re locked into a location, and often a lifestyle

There’s no monthly income, no annual dividend, no cash flow. So from a strict financial lens… it’s not an asset.

But What About Capital Gains?

Yes — real estate can appreciate over time. In Portugal, for example, property prices in Lisbon, Cascais, and Porto have soared over the last decade. But:

• It doesn’t always follow inflation

• Property prices can crash — and they have before

• If you only make money when you sell, and that money is locked in the walls, can you really call it an asset?

What’s more, people forget the opportunity cost: if all your capital is tied to your home, that’s money you’re not investing elsewhere (stocks, business, other real estate).

Why I Still Think Everyone Should Own a Home (at Least Once)

Here’s the thing — I still believe everyone should buy a house to live in, at some point.

Why?

• You learn the process: how loans work, deeds, taxes, construction quality, location strategy. It's a masterclass in adult life.

• You lock in a predictable cost of living, especially in a world of rising rents.

• In Portugal, with historically low interest rates (even now compared to other countries), owning is often cheaper than renting long-term.

• Plus, you have tax benefits: if you sell your main residence and reinvest in another, you can avoid paying capital gains tax. That’s a powerful tool if used smartly.

So maybe you should buy that home — but does it mean you should live in it forever?

What If You Flip Instead of Settle?

Instead of planting roots forever, maybe we need a new mindset:

• Buy smart

• Live for a few years

• Sell when the time (and market) is right

• Reinvest using Portuguese tax incentives

You’re not just living — you’re using your primary residence as a springboard to build wealth.

So… Is It Good or Bad to Invest All Your Money in Your Home?

My take? It depends.

If it’s your only investment, and it doesn't generate income, then yes — it’s a liability in disguise.
But if it’s part of a larger plan, where you’re learning, leveraging, and growing… then it becomes a powerful move.

Don’t just buy a house — have a strategy behind it.

Final Thoughts

Your family home might not make you money every month, but it can still be a great chapter in your financial journey — if you treat it as a tool, not a destination.

Want to explore smarter ways to invest in property in Portugal? Or curious about flipping, Golden Visa markets, or building in Bali?
Let’s talk. This is what we live for at Mentora.