Topic: If Bitcoin goes up very high should i buy a house? - page 97. (Read 133987 times)

depends on how much coin you have ?plus if bitocin goes that high then where is dollar standing ?
why would you invest in a collapsing currency then.

When you go to get a loan and they ask to list your assets and liabilities to determine your credit worthiness, guess where cars and real estate goes. Under assets, not liabilities. The loans you have on the assets are liabilities.

Under your definition, your 401K account would be a liability because you have to pay brokerage fees. Is a retirement account that holds $50,000 in it an asset or a liability?

Yes this is so basic and you seem not to read the definition in the link you post yourself because you are sure you understand what an asset is:


if you own something (a house, car, iPhone, laptop) and it is not increasing your value, as in it is not paying for itself and bringing in money, then it's not an asset.

Then it's a liability. Then it's costing you a money. Then you need a job to pay for all the stuff you own. And the more stuff you own, the more you need to work to keep up with all the bills.

And that is the problem... most of us don't own any assets. We only own liabilities... we are lured into spending our hard earned money on things to keep us poor. You subsidize your liabilities be working for them like a slave.

I like the way kaselit put it:


It's true that "An asset is something that has value" but it also needs the property that it keeps it's value. If it's not putting money in your pocket then slowly it's losing all it's value. If your iPhone is worth USD 600 and it's costing you USD 50 / month to own it than after one year it has value USD 0. Is it still an asset? It can get even to negative value after 1 year. Is it still an asset?

Painfull as it is, most of us never owned an asset and probably never will. Unless you understand fundamentally what an asset is.

Children never get a true financial education at school and they are prepped as consumers to spend spend

jaysabi, be honest, do you own anything that generated money? Anything that pays a dividend while you are away on holidays, when you are not around?

Most of the things we own are costing us money and that money goes to other people and companies. For them it's an asset on their books. For us it's a liability

Take 3 minutes and read

http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/april-2013/rich-dad-scam-6-your-house-is-an-asset.aspx

Thanks for all the info.  Interesting thought to get a real estate loan but how easy is it to get one of those? did you get once because you already have several property? All i would have is some money and a small business which isnt really worth much.

Interesting though, you said houses aren't a good investment and you own several? yikes.

No matter where you live and what tax rules there are, you should get independent advice from an accountant, preferably somebody who understands real estate. If you buy a house there are going to be various implications on the way you are taxed, not only when you buy it (for example here you have to pay a 12% registration fee on top of the purchase price and now for new houses (here) you not only have to pay VAT on the house, but also on the land the house is built on). Once you own the house, your annual tax return will also change, for example here the perceived value of the house (as if it would be rented out) is added to your income, so you get taxed on that too (Rateable Value).

But owning a house means you can also get a house loan and in many countries you can deduct the interest you pay from your income

So... buying a house might be a lot more expensive than just the price sticker you see at the for sale sign and owning a house will be a lot more expensive than you can imagine, especially if it's the first time you own a house... See my previous post: a house is a liability, not an asset.

You probably don't want a mortgage on the house because then the bank owns it until you pay off the last bit after 25 years, but you might consider getting a loan so you can compensate the extra income taxes like Rateable Value.

If you get a mortgage than your house is not yours but you can also get a real estate loan (without the house as a deposit) from the bank where if you have 100% cash down for the house, you give this money as collateral (so no mortgage on the house) and you pay only the interest on the loan (meaning you get a bullet loan with 100% money deposited in a pledge account). At the end of the loan (10 years, 25 years... ) you have to pay up the 100% value of the loan too of course.

This formula has 2 advantages, first you are always the owner of the house, there is no mortgage. Secondly you can take advantage of the interest you pay by deducting it from your income. And the money in the pledge account is actively invested (by the bank) so it can grow to compensate for inflation, with a bit of luck you might even beat inflation but as the bank is investing it for you, they will milk your every turn. Some banks only want to invest in funds with a 100% money back guarantee and these funds always underperform the market).

If you want to buy a house, don't just talk to a real estate broker and your banker, but also get an income tax accountant's advice

disclaimer: I am not an accountant but I do own several houses.

If Bitcoin goes up very high should i buy a house?

Ive been thinking if it went into very high figures i could cash out 80-90% of bitcoin and buy a house outright with no mortgage.  Is that even a good idea though? - basically 80% of networth in a house hmmm.  On the other hand i dont want to have a mortgage and im fed up with renting due to landlords, letting agents and lack of control.

That is not the definition of an asset. An asset is something that has value. Period.

A house is an asset. And yes, a car is an asset too. Please read the economic definition of asset before you post anything further: http://www.investopedia.com/terms/a/asset.asp  

The definition of an asset is not something that earns you money, it's something that has value. This is so basic, it's pointless responding further.

BREAKING DOWN 'ASSET'
1. Assets are bought to increase the value of a firm or benefit the firm's operations. You can think of an asset as something that can generate cash flow, regardless of whether it's a company's manufacturing equipment or an individual's rental apartment.

Poor buy things that generate debits.
Rich buy things that generate credits.

If Bitcoin goes up very high should i buy a house?

Ive been thinking if it went into very high figures i could cash out 80-90% of bitcoin and buy a house outright with no mortgage.  Is that even a good idea though? - basically 80% of networth in a house hmmm.  On the other hand i dont want to have a mortgage and im fed up with renting due to landlords, letting agents and lack of control.

Definition: An asset puts money in your pocket. A liability is costing you money.

The longer you keep a liability, the more it will cost you.

A house is not earning you money, unless you can rent it out and even then it's not always break even.

It's an obvious mistake to label your own house as an asset, and most of the confusion is deliberate by the industry that builds and sells houses. Real estate agents and bankers will keep insisting on spreading the myth that a house is an asset but it's not.

The fact that you save rental money by living in your own house does not make it an asset, the same way that having a car is saving you taxi money.

Is a car an asset? A car has (any) value, so that would make it an asset in your definition, correct? It's clear a car is a liability because it is costing you tax money to keep it on the road, it is costing you insurance annually, you have to pay for a parking space or garage to just store it and if you actually drive it, it's costing you fuel. And intuitively you see it as a liability because it actually (most of the times unless it's a rare classic car) decreases in value when you try to resell it.

Yes house prices can go up, but that does not mean it's an asset. If you think houses go up in value then you never owned and maintained a house. Any house older than 20 year will cost you a fortune in maintenance to keep it up to specs with for example isolation and heating. A house 40 years old has little value unless you want to redo all the plumbing and electricity.

So why do house prices sometimes go up, even if after they are sold they are gutted and completely refurbished? Because of the location: land prices go up and having a casco of a house on it, means you can rebuild it within the existing zoning restriction rules.

Houses are not an asset. If it would be an asset, the bigger the home, the more money it would put in your pocket. The more houses you owned, the money they would generate...

http://lmgtfy.com/?q=the+house+you+live+in+is+not+an+asset

I know it's confrontational for many people aspiring to own a house (and please don't take it personally that I'm pointing this out jaysabi) but trust me: your house is not an asset

Don't take my word for it, google around

If Bitcoin goes up very high should i buy a house?

House is not an investment. House is a debit, like car, like electronic.
Try to use your earning in investments that generate credits for you.

Poor buy things that generate debits.
Rich buy things that generate credits.

Do your sacrifices now, if you want to become rich and buy a house.