The first step in determining whether your home is an asset or a liability is to define an asset because...
that is what will help you determine whether or not it is an asset because it does qualify for some definitions of an asset.
For example, if you're calculating your net worth, I'd include the value of your home in your net worth because it's something you bought and you have that value.
However, if you are calculating your financial freedom number, such as the amount you need to retire or become financially free,
I would not include the value of your home. Because, unless you use it in a specific way, it does not generate cash flow for you.
However, if you own the home and live in it with your family or alone, and it does not generate any income for you, do not include it in your financial freedom.
Many people are perplexed by this because they believe it is an asset. It has a monetary value. When calculating your financial freedom, you should consider your current income.
So, if your home does not generate any income, you cannot include it when calculating your financial freedom number, or the amount required to retire.
Owning a home and not receiving any income from it will not help you retire because we are looking for assets that will provide you with income so that you can easily retire.
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